Spotify has reported another quarter of record profits, marking a significant improvement one year after it increased the price of its Premium plans for the first time in history.
In the second quarter, the Swedish audio streaming service announced an operating income of 266 million euros (approximately $289 million), a notable contrast to the loss of 247 million euros (around $268 million) experienced in the same quarter last year. The number of monthly active users also grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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. We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following this optimistic 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 plans will rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will see a $3 hike to $20. This came after the company raised membership costs for the first time in 13 years by an average of $1 in July of last year.
Despite the price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally and has been reported to have the lowest cancellation rates among major audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock lost more than two-thirds of its value due to multiple quarters of operating losses. Earlier this year, it announced plans to lay off 600 employees, and less than a year later, the company cut 1,500 jobs, amounting to around 17% of its workforce.