Spotify has announced another quarter of record profits, marking one year since the company raised the prices of its Premium plans for the first time.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant recovery from a loss of 247 million euros ($268 million) in the same period last year. Additionally, the number of monthly active users rose 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 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 U.S. Effective this month, individual plan users will see their fees rise by $1 to $12, Duo plan users will pay $2 more at $17, and Family plan users will incur a $3 increase, bringing their total to $20. This move came after the company raised membership prices for the first time in 13 years by an average of $1 in July 2022.
Despite the price hikes, Spotify managed to gain seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the world’s leading audio streaming platform, Spotify has shown resilience, with an analysis from Bloomberg indicating its users are the least likely among streaming services to cancel their subscriptions. However, the company faced challenges in 2022, with its stock value plummeting by more than two-thirds due to multiple quarters of operating losses. In January 2023, Spotify announced it would reduce its workforce by 600 employees, and later cut 1,500 jobs, representing about 17% of its total staff.