Spotify has reported another quarter of record profits, marking a significant year since it executed its first-ever price increase for Premium plans.
In its second quarter, the Swedish audio streaming service posted an operating income of 266 million euros ($289 million), a stark contrast to the loss of 247 million euros ($268 million) recorded the previous year. The platform also experienced a 14% annual increase in monthly active users, reaching 626 million.
“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,” stated CEO Daniel Ek. He noted that the company’s progress has surpassed even its own expectations, suggesting a positive outlook for the future.
In pre-market trading on Tuesday, Spotify’s stock surged nearly 14% following the release of the earnings report, which exceeded analysts’ expectations.
In June, Spotify announced new pricing for its Premium users in the U.S., effective this month. Individual plan users will see an increase of $1 to $12, Duo plan users will pay $2 more at $17, and Family plan users will be charged $3 more, totaling $20. This marked the first price adjustment in 13 years, following a prior increase of roughly $1 last July.
Despite these price hikes, Spotify managed to add seven million net subscribers in the past quarter, surpassing its initial guidance by one million.
As the world’s most popular audio streaming platform, Spotify’s users are also reported to be the least likely to cancel their subscriptions compared to other music and video streaming services, according to a Bloomberg analysis.
However, the company’s financial journey has had its challenges. Spotify’s stock lost over two-thirds of its value in 2022 due to multiple quarters of operating losses. In early 2023, the company announced layoffs of 600 employees, and less than a year later, it reduced its workforce by an additional 1,500, representing about 17% of its staff.