Spotify has announced another quarter of record profits, just a year after it raised the prices of its Premium subscription plans for the first time ever.
The Swedish audio streaming service reported 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. The platform’s monthly active users grew by 14% year-over-year, reaching 626 million.
“It’s an exciting time at Spotify. We keep on innovating and demonstrating that we are not only a great product but also increasingly a great business,” said CEO Daniel Ek. He added that their progress has surpassed even their own expectations, indicating a positive outlook for the future.
Following this upbeat earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced price increases for its Premium users in the U.S. Starting this month, individuals on single plans will see a $1 increase to $12, those on Duo plans will pay $2 more for a total of $17, and Family plan members will incur an additional $3, bringing the total to $20. This marked the first membership cost increase in 13 years, with an average rise of $1 implemented in July 2022.
Despite these increases, Spotify managed to add seven million net subscribers in the most recent quarter, exceeding its prior guidance by one million.
Ranked as the most popular audio streaming service worldwide, Spotify users are also the least likely to cancel their subscriptions compared to those of other audio or video platforms, as highlighted by a Bloomberg analysis.
Despite these recent successes, the company had faced financial hurdles in 2022, losing more than two-thirds of its stock value during that year due to consecutive quarters of operating losses. Earlier in 2023, Spotify announced it would lay off 600 employees, followed by a further reduction of 1,500 jobs, which accounts for roughly 17% of its workforce.