Spotify has reported its latest quarterly earnings, achieving record profits just a year after increasing the prices of its Premium subscription plans for the first time ever.
The Swedish audio streaming service recorded an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period the previous year. Monthly active users rose by 14% year-over-year, 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 price increases for its Premium users in the U.S., effective this month. Individual plan subscribers will see a $1 increase to $12, Duo plan customers will pay $2 more at $17, and Family plan users will face a $3 rise to $20. This increase was the first in 13 years, with an average hike of $1 implemented last July.
Despite these adjustments, Spotify managed to gain seven million net subscribers during the quarter, exceeding its prior expectations by one million.
As the world’s leading audio streaming service, Spotify users are reportedly the least likely among streaming platforms to cancel their memberships, according to an analysis by Bloomberg.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock dropped over two-thirds of its value due to multiple quarters of operating losses. In January 2023, the company announced layoffs of 600 employees, and less than a year later, cut another 1,500 jobs, accounting for around 17% of its workforce.