Spotify has reported another record profit quarter, marking a year since it raised the prices of its Premium subscription plans for the first time in history.
The Swedish audio streaming platform announced an operating income of 266 million euros ($289 million) for the second quarter, a significant recovery from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users increased by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We keep innovating and demonstrating that we are not just a great product but also an increasingly successful business,” stated CEO Daniel Ek. He emphasized that the company is exceeding its own expectations, which is promising for the future.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium subscription in the U.S. Starting this month, individual plan subscribers will see their monthly fee rise by $1 to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan subscribers will incur an additional $3, raising their cost to $20. Last July, the company had already raised subscription prices for the first time in 13 years by an average of $1.
Despite these increases, Spotify added seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are less likely to cancel their subscriptions compared to subscribers of other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial history has not always been positive. In 2022, the company’s stock value plummeted by over two-thirds due to consecutive quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, followed by another cut of 1,500 jobs, amounting to approximately 17% of its workforce, less than a year later.