Spotify has announced a quarter of record profits just one year after raising 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) in the second quarter, a significant increase compared to a loss of 247 million euros ($268 million) in the same period the previous year. The company also saw a 14% annual growth in monthly active users, reaching 626 million.
“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,” stated CEO Daniel Ek. He added that the company’s progress has surpassed even their own expectations, indicating a positive outlook for the future.
Following the promising earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S. Starting this month, individual plans increased by $1 to $12, Duo plans by $2 to $17, and Family plans by $3 to $20. This move followed a similar adjustment last July, which was the first increase in membership costs in 13 years.
Despite the price increases, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous guidance by one million.
As the world’s leading audio streaming platform, Spotify users are reportedly the least likely among audio and video streaming services to cancel their subscriptions, according to a Bloomberg analysis. However, the company has faced challenges in the past; in 2022, Spotify’s stock value plummeted by more than two-thirds amid multiple quarters of operating losses. Earlier this year, the company announced workforce cutbacks, laying off 600 employees in January and 1,500 jobs—approximately 17% of its workforce—less than a year later.