Spotify has reported another record profit quarter, following its first-ever price increase for Premium plans last year.
The Swedish audio streaming platform posted an operating profit of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) a year earlier. The company also saw its monthly active users grow by 14% year-on-year, reaching 626 million.
“It’s an exciting time at Spotify. We keep innovating and proving that we’re not just a great product, but increasingly a strong business,” said CEO Daniel Ek in a statement. “We are achieving this on a timeline that has exceeded even our own expectations, which bodes well for the future.”
Following the release of its better-than-expected 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 U.S. Starting this month, individual plan users will pay $1 more ($12), Duo plan users will pay $2 more ($17), and Family plan users will see an increase of $3 ($20). This followed an average price increase of $1 last July, which marked the first hike in membership costs in 13 years.
Despite these price hikes, Spotify added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service worldwide, Spotify’s users are reportedly less likely than those of other streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, the company’s financials have not always been robust. Spotify’s stock plummeted by more than two-thirds in 2022 amid several quarters of operating losses. In January 2023, it announced the layoff of 600 employees, followed by the cutting of 1,500 jobs—approximately 17% of its workforce—less than a year later.