Spotify announced a record profit for another quarter, following its first-ever price hike for Premium plans a year ago.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. The monthly active user count increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement 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 its Premium users in the United States, effective this month. Individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This was the first membership cost increase in 13 years, raising the prices by an average of $1 last July.
Despite the higher prices, Spotify gained seven million net subscribers during the quarter, outpacing its previous guidance by one million.
As the leading audio streaming service globally, Spotify’s users have demonstrated a lower likelihood of cancelling their subscriptions compared to those of other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial situation has not always been strong. In 2022, Spotify’s stock plummeted by more than two-thirds as it faced several quarters of operational losses. The company announced layoffs of 600 employees in January 2023 and subsequently cut 1,500 jobs, which accounts for around 17% of its workforce.