Spotify has reported another quarter of record profits, just a year after implementing its first-ever price increase for Premium plans.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The company also saw a 14% year-over-year growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s direction, 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 release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading.
Earlier this month, Spotify announced new price increases for its Premium plans in the U.S. Individual plan subscribers will pay $12, an increase of $1, while Duo plan subscribers will pay $17, up by $2. Family plan users will see a $3 increase, bringing their total to $20. This marks the first price hike for the company since it raised membership costs by an average of $1 last July.
Despite these price hikes, Spotify managed to add seven million net subscribers this quarter, which exceeded its previous guidance by one million.
Spotify remains the leading audio streaming platform globally, and a Bloomberg analysis indicates that its users are less likely to cancel their subscriptions compared to those of other audio and video streaming services.
The company’s financial history, however, has not always been positive. In 2022, Spotify’s stock lost over two-thirds of its value amid several quarters of operating losses. In January 2023, the company announced plans to cut 600 jobs, followed by a reduction of 1,500 positions, which accounted for approximately 17% of its workforce, less than a year later.