Spotify has announced another record profit quarter, marking one year since the company increased prices for its Premium subscription plans for the first time.
The Swedish audio streaming giant reported 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) during the same period last year. Additionally, the number of monthly active users surged 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s momentum, 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 price saw an increase of nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users, effective this month. Individual plan subscribers will now pay $12, up by $1, while Duo plan users will see their fee rise by $2 to $17, and Family plan users will pay $20, a hike of $3. This was the first price increase in 13 years after an average adjustment of $1 last July.
Despite these price hikes, Spotify managed to add a net gain of seven million subscribers during the quarter, surpassing its previous forecasts by one million.
Spotify remains the leading audio streaming platform globally, with a Bloomberg analysis indicating that its users are less likely to cancel their subscriptions compared to other streaming services. However, the company has faced challenges in the past, with its stock losing more than two-thirds of its value in 2022 amid several quarters of operating losses. In early 2023, the company announced the layoff of 600 employees, followed by another reduction of 1,500 jobs, roughly 17% of its workforce, within a year.