Spotify has announced another record profit for the second quarter, marking a year since the company raised the prices of its Premium subscription plans for the first time. The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million), a significant improvement from a loss of 247 million euros ($268 million) in the same quarter last year. The company also saw its monthly active users increase by 14% year-over-year, reaching 626 million.
“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,” said CEO Daniel Ek in a statement. He added that the company’s progress has exceeded even their expectations, which looks promising for future growth.
Following the release of its strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the United States. Starting this month, individual plans will cost an additional $1 (totaling $12), Duo plans will increase by $2 (to $17), and Family plans will rise by $3 (to $20). This was the first price adjustment in 13 years, with the last increase being an average of $1 in July 2022.
Despite the price hikes, Spotify managed to add seven million net subscribers in the quarter, which surpassed its previous guidance by one million. According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally and ranks lowest in membership cancellations compared to other streaming giants.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock value dropped by over two-thirds due to multiple quarters of operating losses. In January 2023, the company announced a reduction of 600 employees, and less than a year later, it laid off 1,500 staff members, approximately 17% of its workforce.