Spotify has announced another quarter of record profits, marking a year since it first increased the prices of its Premium subscription plans. The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a remarkable turnaround from a loss of 247 million euros ($268 million) in the same period last year. The company also saw its monthly active users grow by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in Premium subscription prices for users in the U.S. Starting this month, individual plan subscribers will pay $1 more (totaling $12), Duo plan subscribers will see a $2 increase (now $17), and Family plan subscribers will encounter a $3 increase (now $20). This price hike marked the first adjustment in 13 years, averaging a $1 increase.
Despite the increased prices, Spotify gained seven million net subscribers during the quarter, surpassing its prior expectations by one million.
As the world’s leading audio streaming platform, Spotify’s users are reportedly the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, Spotify has faced its share of challenges. The company’s stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses, prompting layoffs of 600 employees in January 2023, followed by a further reduction of 1,500 jobs—about 17% of its workforce—less than a year later.