Spotify has announced another quarter of record profits, marking a year since it increased the prices of its Premium subscription plans for the first time.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% annual increase in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We keep innovating and proving that we are not only a great product but also an increasingly strong business,” stated CEO Daniel Ek. He added that their progress has surpassed even their own expectations, which is promising 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 hike for its Premium users in the U.S. Beginning this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more at $17, and Family plan users will have to pay $3 more, totaling $20. This change follows last July’s decision to raise membership costs for the first time in 13 years by an average of $1.
Despite these price increases, Spotify successfully attracted seven million net new subscribers in the latest quarter, exceeding its previous forecasts by one million.
As the leading audio streaming service globally, Spotify’s users are reportedly the least likely to cancel their subscriptions compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial health has faced challenges in the past. The company’s stock plummeted by over two-thirds in 2022 due to extended periods of operating losses. Earlier this year, Spotify announced the layoff of 600 employees, followed by another round of job cuts affecting 1,500 positions, or about 17% of its workforce, less than a year later.