Spotify has announced another record-breaking quarter of profits, marking a year since it first raised the prices of its Premium subscription plans.
The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from the loss of 247 million euros ($268 million) recorded during the same period last year. The company also saw a 14% year-over-year increase in monthly active users, reaching a total of 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s advancements, stating, “It’s an exciting time at Spotify. We keep on innovating and showing that we aren’t just a great product, but increasingly also a great business.” He highlighted that the momentum has exceeded internal expectations, which he believes is a positive sign for the future.
Following the release of its better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Starting this month, individual plan subscribers will pay $1 more, bringing their total to $12, while Duo plans will see a $2 increase to $17 and Family plans will rise by $3 to $20. This adjustment follows a previous average increase of $1 in membership costs for the first time in 13 years last July.
Despite the price hikes, Spotify gained seven million net subscribers in the last quarter, exceeding its prior guidance by one million.
According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with users demonstrating the lowest likelihood of canceling their subscriptions compared to other audio and video streaming platforms.
However, Spotify has faced financial challenges in the past; its stock plummeted by more than two-thirds in 2022 amid multiple quarters of operating losses. In early 2023, the company announced layoffs of 600 employees, followed by a further reduction of 1,500 jobs, amounting to about 17% of its workforce less than a year later.