Spotify has reported another record profit quarter, marking a significant change since it raised its Premium subscription prices for the first time last year.
The Swedish audio streaming company announced an operating income of 266 million euros (approximately $289 million) for the second quarter, a stark contrast to the loss of 247 million euros ($268 million) recorded in the same period last year. The platform also saw a 14% annual increase 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,” said CEO Daniel Ek in a statement. “We are achieving this 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.
In June, the company announced a price hike for its Premium users in the U.S. Starting this month, individual plan subscribers will see an increase of $1 (totaling $12), while Duo plan subscribers will pay $2 more (now $17) and Family plan users will pay an additional $3 (now $20). This increase was the first price adjustment in 13 years, with an average rise of $1 implemented the previous July.
Despite these increases, Spotify successfully added seven million net subscribers during the quarter, exceeding its prior forecasts by one million.
Spotify remains the leading audio streaming service globally, and according to a Bloomberg analysis, its users are the least inclined to cancel their subscriptions compared to other audio and video streaming platforms.
However, the company has faced challenges in the past. In 2022, Spotify’s stock value plummeted by more than two-thirds, leading to multiple quarters of operating losses. This prompted plans in January 2023 to cut 600 jobs, followed by another reduction of 1,500 positions, accounting for about 17% of its workforce, less than a year later.