Spotify has reported another record profit quarter, following its first-ever price increase for Premium plans one year ago.
The Swedish audio streaming company achieved an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The number of monthly active users also grew by 14% year over year, reaching 626 million.
CEO Daniel Ek stated, “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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users, effective this month. Individual plan subscribers will now pay $12, an increase of $1, while Duo plan users will see a $2 rise to $17, and Family plan users will pay $3 more, totaling $20. This marked the first membership cost increase in 13 years, with an average rise of $1.
Despite these price hikes, Spotify added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
According to a Bloomberg analysis, Spotify is the leading audio streaming service globally, with users showing the lowest cancellation rates compared to other streaming platforms. However, the company has faced financial difficulties in the past, with its stock losing over two-thirds of its value in 2022 amid several quarters of operating losses. In January 2023, Spotify announced a layoff of 600 employees, and less than a year later, 1,500 jobs were cut, amounting to about 17% of its workforce.