Spotify has announced another record quarter of profits, marking a year since the company raised prices on its Premium plans for the first time.
The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users increased by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s future, 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.”
In reaction to the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price hikes for its U.S. Premium subscribers. From this month, individual plan users will pay an additional $1, bringing the total to $12. Duo plan users will see a $2 increase to $17, while Family plan users will pay $3 more, totaling $20. This followed an average price increase of $1 last July, the first adjustment in 13 years.
Despite these increases, Spotify gained seven million net subscribers during the quarter, exceeding previous estimates by one million.
According to a Bloomberg analysis, Spotify remains the world’s leading audio streaming platform, with users being the least likely to cancel their subscriptions compared to other audio or video streaming services.
However, the company’s financial history has faced challenges, with Spotify’s stock plummeting by more than two-thirds in 2022 due to several quarters of operating losses. In early 2023, the company announced plans to lay off 600 employees, followed by another round of cuts affecting 1,500 jobs, or about 17% of its workforce, less than a year later.