Spotify has reported another record profit quarter following its first-ever price increase for Premium plans a year ago. The Swedish audio streaming platform achieved an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. The platform also saw a 14% rise in monthly active users, 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 is achieving results ahead of its expectations, which he believes are positive indicators 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 U.S. Premium subscribers. Starting this month, individual plan users will pay $1 more, bringing the cost to $12, Duo plan users will see an increase of $2 (totaling $17), and Family plan users will pay an additional $3, raising the total to $20. This was the first adjustment in membership fees in 13 years, with the previous increase in July 2022 being an average of $1.
Despite the price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its earlier predictions by one million.
As the leading audio streaming service globally, Spotify users are also among the least likely to cancel their subscriptions, according to a Bloomberg analysis. However, the company’s financial path has not always been smooth. In 2022, Spotify’s stock value plummeted by more than two-thirds due to several quarters of operating losses. To address this, the company announced layoffs of 600 employees in January 2023, followed by a further cut of 1,500 jobs, or about 17% of its workforce, less than a year later.