Spotify has reported another quarter of record profits a year after increasing the price of its Premium plans for the first time. The Swedish audio streaming company announced 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) in the same period last year. Monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm 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 announced a price increase for Premium users in the U.S., effective this month. Individual plans now cost $12, up by $1; Duo plans increased by $2 to $17; and Family plans went up by $3 to $20. This marked the first price hike for membership in 13 years, which averaged around $1.
Despite the price rises, Spotify managed to add seven million net subscribers in the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with users showing a lower likelihood of canceling their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial history has been challenging. The company’s stock lost over two-thirds of its value in 2022 amid several quarters of operating losses. In January 2023, Spotify announced plans to lay off 600 employees and followed that with another round of cuts impacting 1,500 jobs, or approximately 17% of its workforce, less than a year later.