Spotify has reported another quarter of record profits, marking a notable milestone a year after it increased the prices of its Premium plans for the first time.
The Swedish audio streaming company generated an operating income of 266 million euros ($289 million) in the second quarter, a significant turnaround from a loss of 247 million euros ($268 million) recorded during the same period last year. The company also saw its monthly active users rise by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about 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 positive earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its Premium users in the U.S. Beginning this month, individual plan users will see a $1 increase to $12, Duo plan users will pay $2 more for a total of $17, and Family plan users will incur a $3 increase to $20. Last July, the company raised membership costs by an average of $1 for the first time in 13 years.
Despite these price hikes, Spotify managed to gain seven million net subscribers in the quarter, surpassing its previous expectations by one million.
As the world’s leading audio streaming service, Spotify users are less likely to cancel their memberships compared to those of other audio or video streaming platforms, according to a Bloomberg analysis. However, the company’s financial situation has had its struggles; in 2022, Spotify’s stock lost over two-thirds of its value due to multiple quarters of operating losses. In January 2023, the company announced the layoff of 600 employees, and less than a year later, it cut 1,500 jobs, which constitutes about 17% of its workforce.