Spotify has announced record profits for another quarter, following its first-ever price increase for Premium plans last year.
In the second quarter, the Swedish audio streaming service reported an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% year-on-year increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about 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 strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its U.S. Premium users, effective this month. Individual plans will now cost $12, up by $1; Duo plans will be $17, up by $2; and Family plans will be $20, up by $3. This marked the first price hike for membership costs in 13 years.
Despite the increase in prices, Spotify added seven million net subscribers in the quarter, surpassing its guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely among major streaming platforms to cancel their memberships, according to a Bloomberg analysis.
However, the company has faced challenges in the past. Spotify’s stock price dropped by more than two-thirds in 2022 due to multiple quarters of operating losses. In January 2023, the company announced the reduction of 600 employees, and less than a year later, it cut an additional 1,500 jobs, equating to roughly 17% of its workforce.