Spotify has announced another quarter of record profits, marking a significant achievement just one year after it raised the prices of its Premium subscription plans for the first time ever.
The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a stark contrast to a loss of 247 million euros ($268 million) recorded in the same period a year earlier. The number of monthly active users also surged, increasing by 14% year-over-year to reach 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,” CEO Daniel Ek stated. He added that their progress is ahead of expectations, which paints a promising outlook for the future.
Following the release of its encouraging earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium services in the U.S., which took effect this month. Individual plan subscribers now pay $12, an increase of $1, while Duo plans will cost $17 after a $2 increase, and Family plans will now be priced at $20, up by $3. This marked the first membership fee increase in 13 years, averaging an additional $1.
Despite these price hikes, Spotify managed to add seven million net subscribers in the last quarter, exceeding its previous forecast by one million.
Spotify remains the leading audio streaming service globally, with an analysis from Bloomberg indicating that its users are the least likely to cancel their subscriptions compared to other streaming services.
However, the company has not always enjoyed such favorable financial conditions. In 2022, Spotify’s stock plummeted by over two-thirds as it faced several quarters of operating losses. Earlier this year, the company announced layoffs of 600 employees, followed by another reduction of 1,500 jobs, which constituted about 17% of its workforce.