Spotify has reported another quarter of record profits, marking a year since it first raised the prices of its Premium plans. The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) during the same period last year. Monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, 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 positive 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. Starting this month, individual plan subscribers will see a $1 increase to $12, Duo plan users will pay $2 more, totaling $17, and Family plan prices will rise by $3 to $20. This price adjustment followed an average increase of $1 in membership costs last July, the first in 13 years.
Despite these increases, Spotify managed to add seven million net subscribers in the quarter, surpassing its guidance by one million.
As the leading audio streaming service globally, Spotify has been noted for having the lowest cancellation rates among audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial history has not always been strong; in 2022, Spotify’s stock plummeted by more than two-thirds due to consecutive quarters of operating losses. In January 2023, the company announced it would lay off 600 employees, and less than a year later, it cut an additional 1,500 jobs, amounting to roughly 17% of its workforce.