Spotify has reported another quarter of record profits a year after implementing its first-ever price increase for Premium subscriptions. The Swedish audio streaming service achieved 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) during the same period last year. The number of monthly active users grew by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s trajectory, stating, “It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a great product but increasingly a successful business. Our accomplishments have surpassed even our expectations, which bodes well for the future.”
Following the announcement of better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for its Premium plans in the U.S. Starting this month, individual users will see an increase of $1 to $12, those on Duo plans will pay $2 more for a total of $17, and Family plan subscribers will pay an additional $3, bringing their total to $20. This marks the first price hike in 13 years, which averaged $1.
Despite these increases, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million.
Spotify continues to lead as the most popular audio streaming service worldwide, with users less likely to cancel their memberships compared to any other major streaming platform, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. Spotify’s stock lost over two-thirds of its value in 2022 as it encountered multiple quarters of operating losses. In January 2023, the company announced job cuts affecting 600 employees, and less than a year later, it laid off 1,500 staff members, amounting to roughly 17% of its workforce.