Spotify has reported a record quarter of profits one year after increasing the price of its Premium subscriptions for the first time ever.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. Monthly active users rose by 14% year-over-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. “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the impressive earnings report, Spotify 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. Effective this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will incur a $3 increase to $20. This change followed an average increase of $1 in membership fees, the first in 13 years, implemented last July.
Despite the price increases, Spotify successfully added seven million net subscribers during the quarter, surpassing its prior forecast by one million.
As the leading audio streaming platform globally, Spotify users are among the least likely to cancel their memberships compared to other audio or video streaming services, according to a Bloomberg analysis.
However, Spotify’s financial performance has not always been strong. In 2022, the company’s stock suffered a decline of more than two-thirds of its value, attributed to several quarters of operating losses. In early 2023, the company revealed plans to lay off 600 employees, followed by an additional 1,500 job cuts, representing roughly 17% of its workforce.