Spotify has announced another quarter of record profits, a year after the company increased the prices of its Premium plans for the first time ever.
The Swedish audio streaming service reported an operating income of 266 million euros (approximately $289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) during the same period last year. The company also saw a 14% year-over-year rise in its monthly active users, reaching 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we are not only a fantastic product, but also an increasingly successful business,” stated CEO Daniel Ek. “Our progress is surpassing even our own expectations, which is very promising for the future.”
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 plans to raise subscription prices for its U.S. Premium users. Starting this month, individual plan users will see a $1 increase, bringing their total to $12, while Duo plan users will pay $2 more, totaling $17. Family plan subscribers will see a $3 increase, now costing $20. Last July, Spotify raised its membership prices for the first time in 13 years by an average of $1.
Despite these price hikes, Spotify managed to add seven million net subscribers in the quarter, exceeding its previous guidance by one million.
Spotify remains the leading audio streaming platform in the world, and a Bloomberg analysis shows that its users are the least likely to cancel their subscriptions compared to other audio or video streaming services.
However, the company’s financial performance has not always been strong. In 2022, Spotify’s stock plummeted more than two-thirds of its value as the company encountered multiple quarters of operating losses. In January 2023, Spotify announced it would cut 600 jobs, and less than a year later, the company laid off another 1,500 employees, amounting to approximately 17% of its workforce.