Spotify has reported another quarter of record profits, marking a year since it increased the pricing of its Premium plans for the first time in its history.
The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users rose by 14% year-on-year, reaching 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,” stated CEO Daniel Ek. He expressed optimism about the company’s trajectory, indicating that their growth has surpassed even their own expectations.
Following the positive earnings report, Spotify’s stock increased nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium subscription in the U.S., effective this month. Individual plan users will see a $1 increase to $12, Duo plan users will pay an additional $2 for a total of $17, and Family plan subscribers will face a $3 hike, bringing their total to $20. This price adjustment came a year after the company raised membership costs for the first time in 13 years.
Despite the price hikes, Spotify gained seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Spotify maintains its position as the most popular audio streaming service globally, and a recent Bloomberg analysis indicated that its users are the least likely among audio and video streaming platforms to cancel their subscriptions.
However, the journey hasn’t been without challenges. Spotify’s stock value plummeted by more than two-thirds in 2022 as the company reported several quarters of operating losses. In January 2023, it announced the layoff of 600 employees, followed by another reduction of 1,500 jobs, which accounted for around 17% of its workforce, less than a year later.