Spotify has declared another successful quarter, achieving record profits just a year after implementing its first-ever price increase for Premium subscriptions.
The Swedish audio streaming giant reported an operating income of 266 million euros (approximately $289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) a year earlier. The company also saw its monthly active users rise 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. “We are doing so on a timeline that has exceeded even our own expectations. This all bodes very well for the future.”
Following the release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium services in the U.S. Starting this month, users on individual plans will pay an additional $1 (totaling $12), while those on Duo plans will see an increase of $2 (totaling $17), and Family plan users will pay an extra $3 (totaling $20). This marked the first membership price hike in 13 years, averaging a $1 increase.
Despite the price hikes, Spotify successfully added seven million net subscribers in the quarter, surpassing its previous guidance by one million.
As the leading audio streaming platform globally, Spotify users are reportedly the least likely to cancel their subscriptions compared to other audio and video streaming services, according to a Bloomberg analysis.
However, the company faced challenges in the past, with its stock losing over two-thirds of its value in 2022 due to multiple quarters of operating losses. In early 2023, Spotify announced layoffs of 600 employees, followed by another cut of 1,500 jobs, or roughly 17% of its workforce, within less than a year.