Spotify has reported another quarter of record profits, just one year after increasing the prices of its Premium plans for the first time in history.
The Swedish audio streaming company 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) during the same period last year. Monthly active users grew by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not just a great product, but increasingly a strong business,” CEO Daniel Ek stated. “Our progress has surpassed even our own expectations, indicating a bright future ahead.”
Spotify’s stock surged nearly 14% in pre-market trading on Tuesday, following the release of the company’s better-than-expected earnings report.
In June, Spotify announced a price increase for Premium users in the U.S., which took effect this month. Individual plan users will now pay $12, an increase of $1; Duo plans will cost $17, up by $2; and Family plans will rise by $3 to $20. This marks the first membership cost increase in 13 years, an average of $1 implemented in July of the previous year.
Despite the price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify’s users are reportedly the least likely among competitors to cancel their subscriptions, according to a Bloomberg analysis.
However, the company’s financial landscape has not always been positive. In 2022, Spotify’s stock lost more than two-thirds of its value as it endured multiple quarters of operating losses. In January 2023, Spotify announced plans to lay off 600 employees, followed by another reduction of 1,500 jobs, approximately 17% of its workforce, less than a year later.