Spotify has reported a record profit for another quarter, following its first-ever price increase for Premium plans last year.
The Swedish audio streaming service revealed an operating income of 266 million euros ($289 million) for the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) in the same period last year. In addition, the platform’s monthly active users rose 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 earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced price hikes for its Premium subscribers in the U.S. Starting this month, individual plan users will see a $1 increase to $12, while Duo plan users will pay $2 more at $17, and Family plan users will pay $3 more at $20. The company previously raised membership costs for the first time in 13 years last July by an average of $1.
Despite the price increases, Spotify managed to add seven million net subscribers in the last quarter, exceeding its earlier projections by one million.
As the world’s leading audio streaming service, Spotify users are reportedly the least likely to cancel their memberships compared to those of any other audio or video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial performance has faced challenges. Spotify’s stock plummeted by over two-thirds in 2022 amid consecutive quarters of operational losses. In January 2023, the business announced the layoffs of 600 employees, and within less than a year, it cut another 1,500 jobs, accounting for approximately 17% of its workforce.