Spotify has announced another quarter of record profits, marking one year since the company first increased its Premium subscription prices.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement about the company’s trajectory, 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 release of its better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed a price hike for its Premium subscriptions in the U.S. Beginning this month, individual plan users will see an increase of $1, raising the cost to $12. Duo (two-person) plans will increase by $2, resulting in a total of $17, while Family plans will now cost $20 instead of $17, reflecting a $3 increase. This change comes after the company raised membership fees for the first time in 13 years by an average of $1 in July of the previous year.
Despite the price increases, Spotify added seven million net subscribers in the quarter, exceeding its guidance by one million.
As the leading audio streaming service globally, Spotify users show the lowest likelihood of canceling their memberships compared to other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial performance has not always been this positive. In 2022, Spotify’s stock plummeted by more than two-thirds due to several quarters of operational losses. In January 2023, the company announced cuts to 600 jobs, followed by a reduction of 1,500 positions, equating to around 17% of its workforce, less than a year later.