Spotify has announced another quarter of record profits, just one year after the company increased the prices of its Premium subscription plans for the first time ever.
The Swedish audio streaming service 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. Monthly active users saw a growth of 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed optimism in a statement, saying, “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 the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company revealed it would raise prices for Premium users in the U.S. Starting this month, individual plan subscribers will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan subscribers will incur a $3 increase to $20. This adjustment followed an average price increase of $1 in July 2022, marking the first rise in membership costs in 13 years.
Notably, despite the price hikes, Spotify added seven million net subscribers during the quarter, surpassing its earlier guidance by one million.
Spotify remains the leading audio streaming platform worldwide, with users reportedly less likely to cancel their memberships compared to those of other audio or video streaming services, according to an analysis by Bloomberg.
However, the company has faced financial challenges in the past. Spotify’s stock plummeted more than 66% in 2022 due to consecutive quarters of operating losses. In January 2023, the firm announced a reduction of 600 employees, and less than a year later, it cut an additional 1,500 jobs, representing about 17% of its workforce.