Spotify has announced another quarter of record profits one year after implementing its first-ever price increase for Premium plans. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. The platform also saw its monthly active users rise 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 increasingly also a great business,” said CEO Daniel Ek in a statement. He noted that the company is progressing faster than even their own expectations, which bodes well for future growth.
Following the positive earnings report, Spotify’s stock rose nearly 14% 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 subscribers will pay $1 more, bringing the total to $12, Duo plan users will see a $2 increase to $17, and Family plan users will pay $3 more, totaling $20. These increases come after the company raised membership costs for the first time in 13 years by an average of $1 last July. Despite the price hikes, Spotify added seven million net subscribers in the latest quarter, surpassing its previous forecast by one million.
As the world’s leading audio streaming service, Spotify users are among the least likely to cancel their subscriptions, according to a Bloomberg analysis. However, the company has faced challenges in the past, experiencing a decline of over two-thirds in its stock value in 2022 amidst multiple quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees, and later cut approximately 1,500 jobs, which accounted for around 17% of its workforce.