Spotify has announced another quarter of record earnings, marking a year since it increased prices for its Premium subscription plans for the first time.
The Swedish audio streaming company reported an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) the previous year. The number of monthly active users rose by 14% year-over-year to reach 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. He added that the company’s progress has surpassed its own expectations, indicating a promising outlook for the future.
Spotify’s stock surged nearly 14% in pre-market trading on Tuesday following the release of the favorable earnings report.
In June, Spotify announced price hikes for its Premium users in the U.S. Beginning this month, individual plan users will see an increase of $1 to $12, while Duo plan subscribers will pay $2 more at $17, and Family plan users will face a $3 increase to $20. This price adjustment came a year after the company raised membership costs by an average of $1 for the first time in 13 years.
Despite the price increases, Spotify added seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the leading audio streaming platform globally, Spotify users are reportedly the least likely to cancel their subscriptions, according to a Bloomberg analysis. However, the company has faced challenges in the past; its stock plunged more than 66% in 2022 due to several quarters of operational losses. In January 2023, Spotify announced layoffs affecting 600 employees, and later cut 1,500 jobs, representing around 17% of its workforce.