Spotify has reported another record profit quarter, marking a year since it first increased the prices of its Premium subscriptions.
The Swedish audio streaming service announced 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. The platform also saw a 14% rise in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s performance, 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 positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium users in the U.S., effective this month. Individual plan users will see a $1 increase to $12, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This change follows a $1 membership increase in July 2022, which was the first adjustment in 13 years.
Despite the price hikes, Spotify successfully added seven million new subscribers during the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify has shown its users are less likely to cancel their subscriptions compared to other audio and video platforms, according to a Bloomberg analysis.
However, the company faced significant challenges in the past. In 2022, Spotify’s stock value shrank by more than two-thirds, resulting in multiple quarters of operating losses. In response, the company announced layoffs, including 600 positions in January 2023 and an additional 1,500 jobs, which constituted approximately 17% of its workforce, less than a year later.