Spotify has announced another quarter of record profits, one year after raising the prices of its Premium plans for the first time.
The Swedish audio streaming platform reported 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. Additionally, the number of monthly active users grew by 14% year-over-year to reach 626 million.
“It’s an exciting time at Spotify. We continue to innovate, demonstrating that we are not only a great product but increasingly a strong business,” said CEO Daniel Ek in a statement. “Our progress has surpassed our expectations, which is promising for the future.”
Following this positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
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In June, Spotify announced a price increase for its Premium users in the U.S. Effective this month, individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will face a $3 increase to $20. This was the first membership price hike in 13 years, which occurred last July with an average increase of $1.
Despite these price hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Recognized as the leading audio streaming service globally, Spotify users are notably the least likely to cancel their subscriptions compared to other streaming giants, according to a Bloomberg analysis.
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However, the company’s financial health hasn’t always been stable. Spotify’s stock suffered a loss of more than two-thirds of its value in 2022, during a period marked by multiple quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, followed by the reduction of 1,500 jobs, about 17% of its workforce, less than a year later.