Spotify has reported a remarkable quarter, achieving record profits just a year after increasing the price of its Premium plans for the first time.
The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the second quarter, up from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% year-over-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’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 the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in Premium subscription costs for users in the U.S. Effective this month, individual plans will cost $1 more ($12), Duo plans will rise by $2 ($17), and Family plans will see a $3 increase ($20). The company raised membership fees for the first time in 13 years last July, averaging an additional $1.
Despite these price hikes, Spotify gained seven million net subscribers in the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with users being less likely to cancel their subscriptions compared to other audio and video streaming platforms, as per a Bloomberg analysis.
However, the company’s financial outlook was not always so positive. In 2022, Spotify’s stock lost over two-thirds of its value as the company navigated multiple quarters of operating losses. In early 2023, Spotify announced a reduction of its workforce by 600 employees, followed by another cut of 1,500 jobs, which represented approximately 17% of its total staff.