Spotify has reported another quarter of record profits, a year after it increased the price of its Premium plans for the first time ever.
The Swedish audio streaming company posted an operating income of 266 million euros ($289 million) in the second quarter, contrasting with a loss of 247 million euros ($268 million) in the same period the previous year. Monthly active users surged 14% annually, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we’re not only a great product, but increasingly also a great business,” CEO Daniel Ek stated. “We are achieving this on a timeline that has surpassed even our own expectations. This all bodes very well for the future.”
Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday, following the company’s impressive earnings report.
In June, Spotify announced price hikes for Premium users in the U.S. Starting this month, users with individual plans will pay $1 more ($12), those on Duo plans will pay $2 more ($17), and Family plan subscribers will see a $3 increase ($20). Last July, the company had raised membership costs for the first time in 13 years, averaging an increase of $1.
Despite these price rises, Spotify gained seven million net new subscribers during the quarter, exceeding its previous guidance by one million.
Spotify remains the most popular audio streaming service globally, with its users being the least likely to cancel their memberships compared to other audio or video streaming giants, according to a Bloomberg analysis.
However, the company’s financial history has not always been positive. Spotify’s stock lost more than two-thirds of its value in 2022 due to several quarters of operating losses. In January 2023, the company announced it would cut 600 employees. Less than a year later, it further reduced its workforce by 1,500 jobs, or roughly 17% of its staff.