Spotify has announced another quarter of record profits, marking a year since it first raised the prices of its Premium plans. 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) the previous year. The number of monthly active users also rose by 14% year-on-year to reach 626 million.
CEO Daniel Ek expressed optimism 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed that it would increase prices for its Premium subscribers in the U.S. Starting this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more at $17, and Family plan users will face a $3 hike to $20. This followed a price adjustment in July of the previous year, which was the first increase after 13 years.
Despite these price hikes, Spotify saw an addition of seven million net subscribers in the last quarter, exceeding its own forecasts by one million.
As the leading audio streaming service worldwide, Spotify has a lower cancellation rate compared to other major audio and video streaming platforms, according to a Bloomberg analysis. However, the company has faced challenges in the past, including a decline of more than two-thirds in its stock value in 2022 due to several quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, followed by a larger cut of 1,500 jobs, representing about 17% of its workforce, less than a year later.