Spotify has announced another quarter of record profits, marking a year since it first raised the prices of its Premium plans.
The Swedish audio streaming service reported 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. Monthly active users increased by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a great product but also an increasingly successful business,” stated CEO Daniel Ek. “Our progress has surpassed even our own expectations, which bodes well for the future.”
Following the announcement, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday, driven by the company’s better-than-expected earnings report.
In June, Spotify revealed plans to raise prices for Premium subscribers in the United States. Starting this month, users on individual plans will pay $1 more, bringing the total to $12. Duo plans will increase by $2 to $17, while Family plans will rise by $3 to $20. Previously, the Swedish company adjusted its membership costs for the first time in 13 years in July 2022, raising prices by an average of $1.
Despite these price hikes, Spotify managed to gain seven million net subscribers in the quarter, exceeding its previous guidance by one million.
As the leading audio streaming service globally, Spotify has the lowest cancellation rates among audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial journey has not always been smooth. Spotify’s stock plummeted by more than two-thirds in 2022 due to several quarters of operating losses. In early 2023, the company announced layoffs of 600 employees, followed by another round of cuts in less than a year, totaling 1,500 job losses, or about 17% of its workforce.