Spotify has announced another quarter of record profits, following its first-ever increase in Premium plan prices a year ago.
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) from the same period last year. Monthly active users also saw a 14% annual increase, reaching 626 million.
“It’s an exciting time at Spotify. We keep on innovating and demonstrating that we aren’t just a great product but increasingly a great business,” said CEO Daniel Ek in a statement. He added that their growth trajectory has exceeded expectations, indicating a positive outlook for the future.
Following the release of its strong earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced it would increase prices for Premium users in the U.S. Starting this month, individual plan users will pay an additional $1 per month ($12), Duo plan users will pay $2 more ($17), and Family plan users will see a $3 increase, bringing their total to $20. This price adjustment comes after the company raised membership costs for the first time in 13 years by an average of $1 in July of the previous year.
Despite these price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its earlier forecast by one million.
Spotify is recognized as the world’s leading audio streaming platform, reported to have the lowest cancellation rates compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company has faced challenges in the past. In 2022, Spotify’s stock value decreased by more than two-thirds as the firm dealt with multiple quarters of operating losses. In January 2023, the company announced layoffs affecting 600 employees, and less than a year later, it cut an additional 1,500 jobs, amounting to roughly 17% of its workforce.