Spotify has reported another quarter of record profits, marking one year since it raised the prices of its Premium plans for the first time.
The Swedish audio streaming giant revealed an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) a year prior. Monthly active users increased by 14% year-on-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.”
In response to the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S. Starting this month, individual plan subscribers will now pay $12, an increase of $1, while those on Duo plans will pay $17, up from $15, and Family plan users will pay $20, an increase of $3. This pricing adjustment follows the company’s first membership cost increase in 13 years, which averaged an additional $1.
Despite the price increases, Spotify added seven million net subscribers during the quarter, exceeding its own expectations by one million.
Spotify remains the leading audio streaming service globally, with a Bloomberg analysis indicating that its users are the least likely to cancel their memberships compared to other streaming platforms. However, the company faced financial difficulties in the past, witnessing a decline of more than two-thirds in stock value in 2022 due to several consecutive quarters of operating losses. In early 2023, Spotify laid off 600 employees, and less than a year later, it cut an additional 1,500 jobs, representing around 17% of its workforce.