Spotify has reported record profits for another quarter, marking a year since it first increased the price of its Premium plans. The audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, a significant improvement compared to a loss of 247 million euros ($268 million) the previous year. Additionally, monthly active users saw a 14% increase year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm for the company’s progress, 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 stronger-than-expected earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price hike for its Premium subscriptions in the U.S. Starting this month, individual plan users will pay $12, an increase of $1, while Duo plan subscribers will see a $2 rise to $17, and Family plan users will face a $3 increase to $20. This marked the first increase in membership costs in 13 years, with an average rise of $1 implemented last July.
Despite the higher prices, Spotify added seven million net subscribers during the quarter, surpassing its previous guidance by one million.
As the leading audio streaming service globally, Spotify users are notably less likely to cancel their subscriptions compared to those using other audio or video platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been positive. The company’s stock plummeted by more than two-thirds in 2022, amid several quarters of operating losses. In January 2023, Spotify announced it would lay off 600 employees, and less than a year later, it let go of another 1,500 staff members, which accounted for about 17% of its workforce.