Spotify has reported another quarter of record profits, following the increase in its Premium plan prices a year ago.
The Swedish audio streaming giant revealed an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% annual rise in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We are continuing to innovate and demonstrate that we are not only a great product but increasingly also a strong business,” stated CEO Daniel Ek. “Our progress has surpassed even our own expectations, which bodes well for the future.”
Spotify’s stock surged nearly 14% in pre-market trading on Tuesday, following its better-than-anticipated earnings report.
In June, Spotify announced a price hike for its U.S. Premium users. Beginning this month, individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more, bringing their total to $17, and Family plan users will now pay $3 extra for a total of $20. The previous July marked the first price increase for memberships in 13 years, which averaged $1.
Despite the price hikes, Spotify gained seven million net subscribers in the quarter, exceeding its earlier guidance by one million.
Recognized as the leading audio streaming platform globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, Spotify’s financial outlook has not always been positive. The company’s stock plummeted over two-thirds in 2022 due to several quarters of operational losses. In January 2023, Spotify announced it would cut 600 jobs, and less than a year later, it reduced its workforce by 1,500 positions, roughly 17% of its staff.