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 giant reported 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. The platform’s monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed his enthusiasm, 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 surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium users in the U.S. Starting this month, individual plan users will pay an extra $1 (totaling $12), Duo plan users will see a $2 increase (totaling $17), and Family plan users will pay $3 more (totaling $20). This pricing adjustment follows an average increase of $1 last July, the first raise in membership costs in 13 years.
Despite the higher prices, Spotify gained seven million net subscribers during the quarter, surpassing its earlier expectations by one million.
Spotify remains the leading audio streaming service worldwide, with a Bloomberg analysis indicating that its users are less likely than those of any other audio or video streaming competitor to cancel their subscriptions.
However, the company has not always enjoyed such profitability. In 2022, Spotify’s stock lost more than two-thirds of its value amid several quarters of operating losses. Earlier this year, the company announced layoffs of 600 employees, and less than a year later, it reduced its workforce by another 1,500 jobs, approximately 17% of its total staff.