Spotify has announced a record profit for its latest quarter, just one year following its first-ever increase in Premium subscription prices.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the company saw a 14% year-over-year increase in monthly active users, reaching a total of 626 million.
“It’s an exciting time at Spotify. We keep innovating and proving that we are not only a great product but also a thriving business,” stated CEO Daniel Ek. “We are achieving this on a timeline that has surpassed our own expectations, which bodes well for the future.”
Following the release of its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S. Beginning this month, individual plan users will experience a $1 increase ($12), Duo plan users will pay $2 more ($17), and Family plan users will see an increase of $3 ($20). This was the first price adjustment in 13 years, which raised membership fees by an average of $1 in July 2022.
Despite the price increases, Spotify added seven million net subscribers in this quarter, exceeding its previous projections by one million.
Spotify remains the leading audio streaming service globally and has been noted for having the lowest cancellation rates among major audio and video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial situation has not always been strong. In 2022, the company’s stock lost over two-thirds of its value amid multiple quarters of operational losses. In January 2023, Spotify announced layoffs affecting 600 employees, followed by another cut of 1,500 jobs by the end of the year, accounting for approximately 17% of its workforce.