Spotify has reported another quarter of record profits, marking a notable achievement a year after the company first increased the prices of its Premium subscription plans.
The Swedish audio streaming service disclosed an operating income of 266 million euros ($289 million) for the second quarter, in stark contrast to a loss of 247 million euros ($268 million) during the same period last year. Additionally, the number of monthly active users has surged by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for the company’s growth and innovation, 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 stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced that it would be raising prices for its Premium subscriptions in the U.S. Effective this month, individual plan users will see an increase of $1, bringing the monthly cost to $12. Duo plan users will pay $2 more, totaling $17, while Family plan users will face a $3 increase, resulting in a $20 monthly fee. This change follows a price hike last July, the first in 13 years, which averaged $1.
Despite the price adjustments, Spotify experienced a net addition of seven million subscribers in the quarter, exceeding its own expectations by one million.
As the leading audio streaming platform globally, Spotify users demonstrate the lowest cancellation rates compared to other audio and video streaming providers, according to Bloomberg analysis.
However, the company’s financial journey has not always been smooth. In 2022, Spotify’s stock value plummeted by more than two-thirds as it struggled with multiple quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees, followed by an additional layoff of approximately 1,500 jobs, representing around 17% of its workforce less than a year later.