Spotify has announced record profits for the second quarter, one year after increasing the prices of its Premium subscriptions for the first time ever.
The Swedish audio streaming giant reported an operating income of 266 million euros (approximately $289 million), a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. Additionally, the number of 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. He emphasized that the company has exceeded expectations and is optimistic about future growth.
Following the announcement of its 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 users in the United States. Starting this month, individual plans will see a $1 increase to $12, Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This marked the first price adjustment in 13 years, with the previous average hike being $1.
Despite the price increases, Spotify managed to add seven million net subscribers in the last quarter, surpassing its initial guidance by one million.
As the leading audio streaming service globally, Spotify users are notably less likely to cancel their memberships compared to users of other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify has faced challenges in the past. In 2022, the company’s stock value plummeted by more than two-thirds amid several quarters of operating losses. In January 2023, Spotify announced a layoff of 600 employees, followed by a further reduction of 1,500 jobs, representing around 17% of its workforce, less than a year later.