Spotify has announced another record-breaking quarter of profits, a year after it increased the prices of its Premium subscription plans for the first time ever.
The Swedish audio streaming service reported 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. The platform saw its monthly active users grow by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for the company’s performance, 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 hikes for its Premium subscribers in the U.S., which took effect this month. Individual plan users now pay $12, a $1 increase; Duo plan subscribers pay $17, a $2 increase; and Family plan users pay $20, an increase of $3. This adjustment followed the organization’s first membership cost increase in 13 years, which occurred last July, when the average price rose by $1.
Despite the price increases, Spotify successfully gained seven million net subscribers during the quarter, surpassing its own guidance by one million.
Spotify is regarded as the leading audio streaming service globally, and a Bloomberg analysis noted that its users are the least likely among audio or video streaming platforms to cancel their subscriptions.
However, the company’s financial journey has faced challenges. Spotify’s stock value plummeted by more than two-thirds in 2022 due to consecutive quarters of operating losses. In January 2023, the company announced layoffs of 600 employees and, less than a year later, made further cuts of 1,500 jobs, amounting to around 17% of its workforce.