Spotify has announced another record-breaking quarter of profits, marking one year since it first raised the prices of its Premium plans.
The Swedish audio streaming platform reported 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) during the same period last year. Additionally, the number of monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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 earnings announcement, Spotify’s stock price surged nearly 14% in pre-market trading.
In June, Spotify announced a price increase for its Premium services in the U.S. Starting this month, users on individual plans will pay an additional $1, bringing the total to $12. Duo plans will increase by $2 to $17, while Family plans will see a $3 increase to $20. This adjustment followed a previous membership cost rise in July 2022, which was the first increase in 13 years.
Despite these price hikes, Spotify managed to gain seven million net subscribers during the quarter, exceeding its own projections by one million.
Spotify remains the world’s leading audio streaming service and has been noted for having the lowest cancellation rates among major audio and video streaming platforms, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds as it endured multiple quarters of operating losses. In an effort to stabilize the business, the company announced layoffs of 600 employees in January 2023, followed by a further reduction of 1,500 jobs, approximately 17% of its workforce, less than a year later.