Spotify has reported another record-setting quarter of profits, a year after increasing its Premium subscription prices for the first time.
The popular Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same quarter last year. Monthly active users rose by 14% year-on-year, reaching a total of 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a fantastic product but increasingly a strong business,” stated CEO Daniel Ek. He added, “We are achieving this ahead of our 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 price hikes for its Premium plans in the U.S. Effective this month, individual plan subscribers will pay $1 more for a total of $12, Duo plan users will see a $2 increase to $17, and Family plan subscribers will incur a $3 rise to $20. Last July marked the first membership cost increase in 13 years, with an average price hike of $1.
Despite these increases, Spotify successfully added seven million net subscribers in the last quarter, surpassing its prior forecast by one million.
As the leading audio streaming platform globally, Spotify users are reported to be the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company faced challenges in the past, with its stock plummeting by more than two-thirds in 2022 due to consecutive operating losses. In January 2023, Spotify announced the layoff of 600 employees, followed by another cut of 1,500 jobs, approximately 17% of its workforce, less than a year later.