Spotify has announced another record-setting quarter, achieving impressive profits just a year after it increased the price for its Premium plans for the first time.
The Swedish audio streaming giant reported an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users rose by 14% year-on-year, 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. He noted that the company’s progress has surpassed even its own expectations, indicating a positive outlook for the future.
Following this better-than-anticipated earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
In June, Spotify announced a price hike for its Premium plans in the U.S. Starting this month, individual plan users will see an increase of $1 to $12, while those using Duo plans will pay an additional $2, bringing the total to $17. Family plan users will experience a $3 increase to $20. This marks the first increase in membership costs since July 2022, when prices went up by an average of $1 after 13 years.
Despite these price increases, Spotify added seven million net subscribers in the last quarter, exceeding its previous guidance by one million.
As the world’s most popular audio streaming service, Spotify users are reportedly less likely to cancel their subscriptions compared to users of other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey hasn’t always been smooth. In 2022, Spotify’s stock plummeted by more than two-thirds amid several quarters of operational losses. In January 2023, the company announced plans to reduce its workforce by 600 employees, and less than a year later, another 1,500 jobs were cut, accounting for roughly 17% of its total staff.