Spotify has announced another quarter of record profits, marking one year since it increased the prices of its Premium subscription plans for the first time in its history.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a turnaround from a loss of 247 million euros ($268 million) in the same period last year. The platform also saw a 14% annual increase in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a great product but increasingly a strong business,” stated CEO Daniel Ek. He added that the company’s achievements have surpassed their own expectations and that this trend points towards a positive future.
Following this favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S. Effective this month, individual plan users will see an increase of $1, bringing the total to $12, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This price adjustment came after the company raised membership costs for the first time in 13 years by an average of $1 last July.
Despite these price hikes, Spotify successfully gained seven million net subscribers in the latest quarter, exceeding its earlier projections by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their subscriptions, according to a Bloomberg analysis. However, the company’s financial performance has had its challenges, as Spotify’s stock lost over two-thirds of its value in 2022 amid multiple quarters of operating losses. In January 2023, the company announced a reduction of 600 employees, followed by another cut of 1,500 jobs, about 17% of its workforce, less than a year later.