Spotify has announced another quarter of record profits, marking a year since it first raised the prices of its Premium subscription plans.
In the second quarter, the Swedish audio streaming company reported an operating income of 266 million euros ($289 million), a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The number of monthly active users also increased by 14% year-over-year to reach 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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.” He added that the company’s performance has exceeded expectations, promising a positive outlook for the future.
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced an increase in subscription costs for Premium users in the U.S. Beginning this month, individual plans will now cost $12, an increase of $1; Duo plans will rise by $2 to $17; and Family plans will see a $3 hike, bringing the total to $20. This was the first membership price increase in 13 years, with a similar average increase executed in July of the previous year.
Despite the higher subscription fees, Spotify managed to add seven million net subscribers during the quarter, exceeding its earlier estimates by one million.
Spotify remains the leading audio streaming service globally, with users least likely to cancel their subscriptions compared to other streaming platforms, according to a Bloomberg analysis. However, its financial health had faced challenges in the past, with the company’s stock losing more than two-thirds of its value in 2022 amid a number of operating losses. In early 2023, Spotify announced reductions affecting 600 employees and later cut 1,500 jobs, approximately 17% of its workforce.