Spotify has once again reported record profits, achieving this milestone a year after the company implemented its first-ever increase in Premium plan prices.
The Swedish audio streaming giant announced an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the platform saw its monthly active users rise by 14% year-over-year to reach 626 million.
“It’s an exciting time at Spotify. We continue to innovate and prove that we are not only a great product but also a strong business,” stated CEO Daniel Ek. He expressed optimism about the company’s trajectory, saying it has exceeded even their expectations.
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
Earlier this June, Spotify announced a price increase for its Premium plans in the U.S. as of this month. Individual plan subscribers will see a $1 increase to $12, Duo plan users will pay $2 more bringing their total to $17, and Family plan subscribers will incur a $3 hike to $20. This followed the first price increase in 13 years in July 2022, where membership costs rose by an average of $1.
Despite these price hikes, Spotify successfully added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service worldwide, Spotify’s users are reportedly the least likely to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis.
However, the company has faced challenges in the past; its stock value plummeted by more than two-thirds in 2022 due to consecutive quarters of operating losses. In January 2023, Spotify announced the layoffs of 600 employees, followed by another cut of 1,500 jobs, approximately 17% of its workforce, less than a year later.