Spotify has announced another quarter of record profits, which comes one year after the company increased the prices of its Premium subscription plans for the first time.
The Swedish audio streaming service reported an operating profit of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. Additionally, the platform saw its monthly active users rise by 14% year-on-year, totaling 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium plans in the U.S., effective this month. Individual plan users will pay an additional $1, raising their monthly fee to $12; Duo plan users will see an increase of $2 to $17; and Family plan users will pay $3 more, totaling $20. This was the first price increase in 13 years, with the average cost rising by $1 last July.
Despite these price increases, Spotify managed to add seven million net subscribers during the quarter, surpassing its previous guidance by one million.
Spotify remains the leading audio streaming service globally, with users being the least likely to cancel their subscriptions compared to other streaming platforms, as noted in a Bloomberg analysis.
However, Spotify’s financial history has not always been rosy. In 2022, the company’s stock plummeted by more than two-thirds due to several quarters of operating losses. In early 2023, the company announced layoffs affecting 600 employees, and less than a year later, it cut 1,500 jobs, equating to about 17% of its workforce.