Spotify has announced another quarter of record profits, following its historic price increase for Premium plans last year.
The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million) for the second quarter, bouncing back from a loss of 247 million euros ($268 million) a year prior. The number of monthly active users rose by 14% year-over-year, 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 expressed optimism about the company’s trajectory, noting it has exceeded expectations, which is promising for the future.
Following the announcement of its better-than-expected earnings, Spotify shares surged nearly 14% in pre-market trading on Tuesday.
Earlier this year, Spotify announced price increases for Premium users in the United States. Individual plans now cost $12, up by $1, while Duo plans increased by $2 to $17, and Family plans went up by $3 to $20. These changes came after the company raised membership costs for the first time in 13 years by an average of $1 last July.
Despite the price hikes, Spotify successfully added seven million net subscribers in the quarter, exceeding its initial guidance by one million.
According to a Bloomberg analysis, Spotify remains the world’s most popular audio streaming service, with its users being the least likely among streaming platforms to cancel their subscriptions. However, the company has faced significant financial challenges in the past. In 2022, Spotify’s stock lost over two-thirds of its value due to several quarters of operational losses. In January 2023, the company announced layoffs of 600 employees, followed by an additional 1,500 job cuts, representing roughly 17% of its workforce, less than a year later.