Spotify has reported record profits for another quarter, just one year after it increased the prices of its Premium plans for the first time ever.
The Swedish audio streaming company announced an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The platform also saw its monthly active users rise by 14% year-over-year, reaching a total of 626 million.
“It’s an exciting time at Spotify. We keep innovating and demonstrating that we are not only a great product but also becoming a strong business,” stated CEO Daniel Ek. “We are achieving this on a timeline that has surpassed even our own expectations, indicating a promising future ahead.”
Following the release of its better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium plans in the United States. Beginning this month, individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more for a total of $17, while Family plan users will experience a $3 increase, bringing their total to $20. This price hike followed a previous adjustment last July, which marked the first increase in 13 years, averaging $1 across different plans.
Despite these rate changes, Spotify added a net of seven million subscribers in the quarter, exceeding its previous projections by one million.
Spotify continues to hold its position as the leading audio streaming service globally, with users showing the least likelihood of canceling their subscriptions compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company faced significant challenges in the past. In 2022, Spotify’s stock plummeted by more than two-thirds amid several quarters of operating losses. In January 2023, the company made the decision to lay off 600 employees, followed by another round of job cuts impacting 1,500 positions, which accounted for roughly 17% of its workforce.