Spotify has reported another quarter of record profits, a year after the company increased the price of its Premium plans for the first time in its history.
The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) reported a year earlier. The platform’s monthly active users surged by 14%, reaching 626 million.
CEO Daniel Ek commented on the company’s progress, 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 the positive earnings report, Spotify’s stock rose nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced plans to raise its prices for Premium users in the U.S., which took effect this month. Individual plan users will see an increase of $1, bringing their cost to $12, while Duo plans will rise by $2 to $17, and Family plans will increase by $3 to $20. This price hike marked the first increase in membership costs in 13 years, with the average increase being $1.
Despite these price adjustments, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Spotify holds the title of the most popular audio streaming service globally, with users showing the lowest likelihood of canceling subscriptions compared to other streaming services, according to a Bloomberg analysis.
However, the company faced challenges in the past, as its stock value dropped by more than two-thirds in 2022 due to multiple quarters of operational losses. In January 2023, Spotify announced the elimination of 600 jobs, followed by further layoffs of 1,500 employees, accounting for roughly 17% of its workforce less than a year later.