Spotify has announced a record-breaking quarter for profits, just one year after increasing the prices of its Premium subscription plans for the first time ever. 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% year-over-year growth in monthly active users, totaling 626 million.
“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,” said CEO Daniel Ek in a statement. He added that the company’s progress is ahead of even their own expectations, indicating a positive outlook for the future.
Following the release of its favorable earnings report, Spotify’s stock surged almost 14% in pre-market trading on Tuesday.
In June, Spotify had announced a price increase for its Premium users in the U.S. Effective this month, individual plans will cost $1 more ($12), Duo plans will rise by $2 ($17), and Family plans will increase by $3 ($20). Last July, the company raised membership costs for the first time in 13 years, averaging a $1 increase.
Despite these price hikes, Spotify managed to gain seven million net subscribers in the quarter, exceeding its prior forecast by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their memberships compared to users of other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past; Spotify’s stock plummeted by over two-thirds in 2022 due to consecutive quarters of operating losses. In January 2023, the company announced plans to reduce its workforce by 600 employees, followed by another reduction of 1,500 jobs, approximately 17% of its total staff, less than a year later.