Spotify has announced a new record for profits just a year after increasing its Premium subscription prices for the first time in its history.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, contrasting sharply with a loss of 247 million euros ($268 million) during the same period last year. The platform’s monthly active users rose by 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s current trajectory, 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 release of 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 subscription plans in the U.S., effective this month. Users on individual plans will now pay $12, an increase of $1, while Duo plans will rise by $2 to $17, and Family plans will cost $20 after a $3 increase. This marked the company’s first price hike in 13 years, occurring in July 2022 when the average membership fee also went up by $1.
Despite these increases, Spotify was able to add seven million net subscribers in the recent quarter, exceeding its own projections by one million.
Acknowledged as the leading audio streaming service globally, Spotify users are less likely to cancel their subscriptions compared to those on other streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial history has not been without challenges. In 2022, the company’s stock value plummeted by more than two-thirds amid several quarters of operating losses. In early 2023, Spotify announced layoffs affecting 600 employees, followed by another reduction of approximately 1,500 jobs, or around 17% of its workforce, less than a year later.