Spotify has reported impressive quarterly earnings, achieving record profits just one year after implementing its first-ever price increase for Premium plans.
The 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) the previous year. Additionally, the platform saw a 14% year-over-year increase in monthly active users, reaching a total of 626 million.
“It’s an exciting time at Spotify,” said CEO Daniel Ek in a statement. “We continue to innovate and demonstrate that we are not only a great product but also an increasingly strong business. Our progress has exceeded even our expectations, which bodes well for our future.”
Following the release of the strong earnings report, Spotify’s stock jumped 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 an additional $1, bringing their total to $12, while Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This price increase, the first since July 2022, was the company’s first adjustment in membership costs in 13 years.
Despite the hike in prices, Spotify gained seven million net subscribers during the quarter, surpassing prior guidance by one million.
As the leading audio streaming platform globally, Spotify boasts the lowest cancellation rates among major audio and video streaming services, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. Spotify’s stock dropped more than 66% in 2022 amid several quarters of operating losses. In January 2023, the company announced the layoffs of 600 employees, and later eliminated an additional 1,500 positions, representing about 17% of its workforce.