Spotify has announced record profits for another quarter, marking a year since the company raised the prices of its Premium plans for the first time ever.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement 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 release of the strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for Premium users in the U.S. Effective this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will pay $3 more, bringing their total to $20. This price adjustment follows the first average increase in membership costs in 13 years last July.
Despite these increases, Spotify added seven million net subscribers this quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are the least likely among major audio or video streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, the company’s financial health has not always been stable. In 2022, Spotify’s stock lost more than two-thirds of its value amid several quarters of operating losses. In early 2023, the company announced a layoff plan affecting 600 employees, followed by a further reduction of 1,500 jobs, which constituted about 17% of its workforce.