Spotify has announced another quarter of record profits, just a year after it raised the prices of its Premium plans for the first time in its history.
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) in the same period last year. Monthly active users also saw a 14% increase year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We are continuing to innovate and proving that we are not only a great product but also a thriving business,” stated CEO Daniel Ek. “We have exceeded our own expectations, and this is promising for our future.”
Following the company’s better-than-anticipated 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, individual plan users will see a $1 increase, bringing the total to $12. Duo plans will rise by $2 to $17, while Family plans will cost $3 more, totaling $20. This adjustment follows a previous average price increase of $1 last July, marking the first rise in membership costs in 13 years.
Despite these price hikes, Spotify managed to add seven million net subscribers in the latest quarter, exceeding its own guidance by one million.
Spotify is recognized as the leading audio streaming platform globally, with users showing a lower likelihood of canceling subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company’s financial path has not always been smooth. In 2022, Spotify’s stock plummeted by more than two-thirds, resulting from several quarters of operating losses. In January 2023, the company revealed plans to lay off 600 employees, followed by a larger cut of 1,500 jobs, representing approximately 17% of its workforce, less than a year later.