Spotify has announced another quarter of record profits, marking a year since it first increased the prices of its Premium plans.
The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also saw a boost, growing 14% year-over-year to reach 626 million.
“It’s an exciting time at Spotify. We keep innovating and demonstrating that we’re not just a great product, but increasingly a robust business,” stated CEO Daniel Ek. He expressed optimism about the company’s future, stating that growth has outpaced their expectations.
Following the positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S. Starting this month, individual plan users will pay $1 more, bringing the total to $12, while Duo plan users will see a $2 increase to $17, and Family plan subscribers will incur a $3 rise to $20. This follows last year’s hike, which was the first in 13 years, with an average increase of $1.
Despite the price adjustments, Spotify managed to add seven million net subscribers during the quarter, surpassing its prior guidance by one million.
As the leading audio streaming platform globally, Spotify users are the least likely to cancel their memberships compared to other audio or video streaming services, according to a Bloomberg analysis.
However, the company has not always seen such financial success. In 2022, Spotify’s stock plummeted over two-thirds of its value due to several quarters of operating losses. The company announced layoffs of 600 employees in January 2023 and followed this with another 1,500 job cuts, which accounted for about 17% of its workforce.