Spotify has announced another quarter of record profits, marking a year since it raised the prices of its Premium plans for the first time.
The Swedish audio streaming giant reported 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) in the same period last year. The number of monthly active users also grew 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 release of the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price increases for its Premium offerings in the U.S., effective this month. Individual plans will now cost $12, an increase of $1; Duo plans will be priced at $17, up by $2; and Family plans will rise to $20, an increase of $3. This followed a similar price adjustment last July, which saw membership costs rise by an average of $1 for the first time in 13 years.
Despite the recent price hikes, Spotify managed to add seven million net subscribers in the quarter, surpassing its prior guidance by one million.
Spotify continues to dominate the audio streaming market, and a Bloomberg analysis indicated that its users are the least likely among streaming services to cancel their subscriptions.
However, the company has faced financial struggles in the past. In 2022, Spotify saw its stock value plummet by more than two-thirds due to consecutive quarters of losses. In January 2023, the company announced layoffs affecting 600 employees, followed by another round cutting approximately 1,500 jobs, which equates to around 17% of its workforce.