Spotify has announced another quarter of record profits, one year after it implemented its first-ever price increase for Premium plans.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% year-over-year increase in monthly active users, reaching 626 million.
Spotify CEO Daniel Ek expressed enthusiasm about the company’s growth, 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 strong earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium users in the U.S., effective this month. Individual plan subscribers will pay $1 more, totaling $12, while Duo plans will see a $2 increase to $17, and Family plans will rise by $3 to $20. This marked the first membership cost increase in 13 years, with an average rise of $1 implemented in July 2022.
Despite these price adjustments, Spotify successfully added seven million net subscribers in the last quarter, surpassing its earlier projections by one million.
Recognized as the leading audio streaming service globally, Spotify users are reportedly the least likely among streaming platforms to cancel their subscriptions, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past, with Spotify’s stock plummeting more than two-thirds in 2022 due to multiple quarters of operational losses. In January 2023, the company announced a reduction of 600 jobs, followed by a further cut of 1,500 positions, accounting for about 17% of its workforce, less than a year later.