Spotify has reported a record profit for another quarter, marking a year since it first raised the prices of its Premium plans.
The Swedish audio streaming service announced 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) a year earlier. The company also saw a 14% increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s progress, 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, which bodes well for the future.”
Following the earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium plans in the U.S. Beginning this month, individuals will pay $12 (an increase of $1), Duo plans for two people will cost $17 (up by $2), and Family plans will rise to $20 (an increase of $3). This move followed a previous price hike in July 2022, which was the first in 13 years.
Despite these price adjustments, Spotify managed to add seven million net subscribers this quarter, surpassing its previous forecast by one million.
Bloomberg’s analysis identified Spotify as the leading audio streaming platform globally, noting that its users are among the least likely to cancel their memberships compared to other audio or video streaming services.
However, Spotify’s financial history has been rocky, with stock values plummeting by more than two-thirds in 2022 amidst ongoing operating losses. In January 2023, the company announced the laying off of 600 employees, and by the end of the year, it had cut approximately 1,500 jobs, representing about 17% of its workforce.