Spotify has achieved another quarter of record profits, marking a year since it implemented its first-ever price increase for Premium plans.
The Swedish audio streaming service reported 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 quarter last year. Additionally, the company saw a 14% year-over-year growth in monthly active users, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about the company’s performance, 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. This all bodes very well for the future.”
Following the announcement of better-than-expected earnings, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed it would be raising prices for its Premium services in the U.S. Starting this month, individual plan users will pay $12 (an increase of $1), Duo plan users will see a rise to $17 (up by $2), and Family plan subscribers will pay $20 (an increase of $3). This change came almost a year after the company raised membership costs for the first time in 13 years.
Despite these price hikes, Spotify gained seven million net subscribers during the quarter, exceeding its previous forecast by one million.
As the world’s leading audio streaming service, Spotify users reportedly have the lowest cancellation rates among major audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial situation has not always been positive. In 2022, Spotify stock decreased by over two-thirds due to consecutive quarters of operational losses. In January 2023, the firm announced job cuts affecting 600 employees, and less than a year later, it laid off an additional 1,500 employees, approximately 17% of its workforce.