Spotify has reported another record quarter for profits, marking a year since it first increased prices for its Premium plans. The Swedish audio streaming company announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement from a loss of 247 million euros ($268 million) during the same time last year. The number of monthly active users rose by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed excitement over the company’s progress, stating, “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.
In June, Spotify announced a price increase for its Premium plans in the U.S. Starting this month, individual subscribers will see their fees rise by $1 to $12, Duo plans will increase by $2 to $17, and Family plans will go up by $3 to $20. Last July, the company raised its membership costs by an average of $1, the first increase in 13 years.
Despite these increases, Spotify gained seven million net subscribers during the quarter, outperforming its previous expectations by one million.
As the world’s leading audio streaming service, Spotify shows low cancellation rates among users, according to a Bloomberg analysis. However, the company has faced challenges in the past, losing over two-thirds of its stock value in 2022 due to a series of operating losses. In January 2023, Spotify announced the layoffs of 600 employees, followed by another round of cuts affecting 1,500 jobs, or about 17% of its workforce.