Spotify has reported another quarter of record profits, marking significant growth just a year after the company raised the price of its Premium plans for the first time.
The Swedish audio streaming service announced an operating income of 266 million euros ($289 million) for the second quarter, a notable improvement from a loss of 247 million euros ($268 million) in the same period last year. The platform also saw a 14% annual increase in monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate, demonstrating that we are not only a great product but also an increasingly strong business,” stated CEO Daniel Ek. “We are exceeding our own expectations in terms of growth, which bodes well for our future.”
Following the release of its better-than-expected earnings report, Spotify’s stock jumped nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users. Starting this month, individual plan users will pay $12, up by $1; Duo plans will rise by $2 to $17; and Family plans will increase by $3 to $20. This price hike followed a similar increase last July, when the company raised membership costs by an average of $1 for the first time in 13 years.
Despite the price increases, Spotify managed to add seven million net subscribers during the quarter, exceeding its previous guidance by one million.
As the most popular audio streaming service globally, Spotify’s users have been found to be the least likely to cancel their subscriptions compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial history has not always been robust. In 2022, Spotify’s stock value plummeted by more than two-thirds as it faced multiple quarters of operating losses. In early 2023, the company announced plans to lay off 600 employees, followed by a larger reduction of 1,500 jobs, which constituted approximately 17% of its workforce.