Spotify has announced another quarter of record profits, achieving this milestone a year after it increased the prices of its Premium subscription plans for the first time.
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 a year prior. The number of monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for the company’s trajectory, 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 report, Spotify’s stock saw a nearly 14% rise 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, bringing the cost to $12. Duo plans will see a $2 increase to $17, while Family plans will cost $20, an increase of $3. This price adjustment came after the company raised membership fees by an average of $1 for the first time in 13 years last July.
Despite the higher prices, Spotify gained seven million net subscribers in the quarter, surpassing its prior estimate by one million.
According to a Bloomberg analysis, Spotify remains the most popular audio streaming service globally, with its users being the least likely to cancel their subscriptions compared to other audio and video streaming giants.
However, the company has faced financial challenges. In 2022, Spotify’s stock diminished by more than two-thirds in value as the business dealt with multiple quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, and less than a year later, it cut approximately 1,500 jobs, or 17% of its workforce.