Spotify has announced another quarter of record profits, just a year after it implemented its first price increase for Premium plans.
The Swedish audio streaming service reported 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) the previous year. Monthly active users rose by 14% year-over-year to reach 626 million.
“It’s an exciting time at Spotify. We continue to innovate and demonstrate that we’re not only a great product, but increasingly a strong business,” said CEO Daniel Ek in a statement. “Our progress has exceeded even our own expectations, which bodes well for the future.”
Following this favorable earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, the company announced it would be raising prices for Premium users in the United States. Starting this month, those on individual plans will see a $1 increase to $12, Duo plans will go up by $2 to $17, and Family plans will increase by $3 to $20. This marked the first membership cost increase in 13 years, with an average hike of $1 last July.
Despite these price hikes, Spotify added seven million net subscribers in the quarter, outpacing its previous guidance by one million.
As the leading audio streaming platform globally, Spotify users are less likely to cancel their subscriptions compared to those on other audio or video streaming services, according to a Bloomberg analysis.
However, the company has faced financial challenges in the past. Spotify’s stock lost more than two-thirds of its value in 2022, after enduring several quarters of operating losses. In January 2023, the company announced it would cut 600 jobs, followed by a further reduction of 1,500 positions, which accounted for approximately 17% of its workforce.