Spotify has announced another quarter of record profits, marking a notable achievement one year after introducing its first-ever price increase for Premium plans.
The Swedish audio streaming service 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) the previous year. The company also saw a 14% annual rise in monthly active users, bringing the total to 626 million.
“It’s an exciting time at Spotify. We keep on innovating and showing that we are not just a great product but increasingly also a great business,” stated CEO Daniel Ek. “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 its positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in prices for its Premium users in the U.S. Starting this month, individuals on plans will see their monthly fee rise by $1 (to $12), while Duo plans will increase by $2 (to $17) and Family plans will go up by $3 (to $20). This marked the first price hike in 13 years, with the previous increase in July resulting in an average cost raise of $1.
Despite these increases, Spotify reported adding seven million net subscribers in the quarter, exceeding its earlier guidance by one million.
As the most popular audio streaming platform globally, Spotify users are reportedly the least likely among audio and video streaming services to cancel their subscriptions, according to a Bloomberg analysis.
However, Spotify’s financial history tells a different story. The company’s stock lost more than two-thirds of its value in 2022 as it dealt with several quarters of operational losses. In January 2023, Spotify announced it would lay off 600 employees, and less than a year later, the company cut an additional 1,500 positions, approximately 17% of its workforce.