Spotify has announced another record profit quarter, just a year after increasing the prices of its Premium plans for the first time in its history. The Swedish audio streaming service reported an operating income of 266 million euros ($289 million) for the second quarter, a significant contrast to the loss of 247 million euros ($268 million) reported a year prior. The company also saw a 14% annual increase in monthly active users, reaching 626 million.
CEO Daniel Ek expressed optimism about the company’s trajectory, 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 release of its earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for Premium users in the U.S., effective this month. Individual plan subscribers will pay $1 more, bringing the total to $12, while Duo plan users will see a $2 increase to $17, and Family plan subscribers will pay $3 more for a total of $20. This marked the first increase in membership costs in 13 years, with the previous average rise being $1 last July.
Despite the price hikes, Spotify successfully added seven million net subscribers during the quarter, exceeding its prior guidance by one million.
Spotify remains the leading audio streaming platform globally, with its subscribers showing the lowest cancellation rates compared to other audio or video streaming services, according to a Bloomberg analysis. However, the company has faced challenges in the past; its stock value dropped by more than two-thirds in 2022 amid several quarters of operating losses. In January 2023, Spotify announced the layoff of 600 employees, and less than a year later, it reduced its workforce by 1,500 jobs, or around 17% of its total staff.