Spotify has reported another quarter of record profits, marking one year since it increased the prices of its Premium subscription plans for the first time.
The Swedish audio streaming platform achieved an operating income of 266 million euros ($289 million) in the second quarter, a significant improvement from a loss of 247 million euros ($268 million) in the same period last year. The number of monthly active users surged by 14% year over year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about 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 positive earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, the company announced a price increase for U.S. Premium users. Starting this month, individual plan subscribers will see a $1 increase to $12, while Duo plan users will pay $2 more, raising their cost to $17, and Family plan subscribers will incur a $3 hike, resulting in a total of $20. These adjustments followed last July’s first price increase in 13 years, raising costs by an average of $1.
Despite the price hikes, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify’s subscribers are also less likely to cancel their memberships compared to users of other audio or video streaming platforms, as indicated by a Bloomberg analysis.
However, the company’s financial history has not always been robust. In 2022, Spotify’s stock plummeted by over two-thirds as it reported several quarters of operating losses. In January 2023, the company announced plans to lay off 600 employees and subsequently cut around 1,500 jobs, amounting to roughly 17% of its workforce less than a year later.