Spotify has reported another quarter of record profits, a year after it implemented its first-ever price increase for Premium plans. The Swedish streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The company also noted a 14% increase in monthly active users, reaching a total of 626 million.
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 positive earnings report, Spotify’s stock saw a nearly 14% increase in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium offerings in the U.S. Starting this month, individual plan users will pay $12 (up by $1), Duo plan users will pay $17 (up by $2), and Family plan users will pay $20 (up by $3). This marked the first time in 13 years that the company raised membership fees, increasing them by an average of $1 last July.
Despite the price hikes, Spotify gained seven million net subscribers during the quarter, exceeding its previous guidance by one million.
Recognized as the leading audio streaming service globally, Spotify’s subscribers are also reportedly the least likely to cancel their memberships compared to other streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial history has not always been rosy. The company’s stock value plummeted by more than two-thirds in 2022 amid several quarters of losses, leading to the announcement of 600 job cuts in January 2023, followed by an additional 1,500 layoffs—about 17% of its workforce—less than a year later.