Spotify has reported record profits for another quarter, a year after it increased prices for its Premium plans for the first time in its history. The Swedish audio streaming giant revealed 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 grew by 14% year-on-year, reaching 626 million.
CEO Daniel Ek expressed excitement 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 this better-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium users in the U.S. Effective this month, those on individual plans will see a $1 increase to $12, Duo plans will rise by $2 to $17, and Family plans will go up by $3 to $20. This price adjustment followed a prior increase in July 2022, which was the first in 13 years.
Despite these price raises, Spotify successfully gained seven million net subscribers in the quarter, exceeding its guidance by one million.
Spotify remains the leading audio streaming service globally, with its users the least likely among audio or video platforms to cancel their subscriptions, according to a Bloomberg analysis. However, the company has faced financial challenges in the past; Spotify’s stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In January 2023, Spotify announced a layoff of 600 employees, and less than a year later, it cut 1,500 jobs, amounting to roughly 17% of its workforce.