Spotify has announced another quarter of record profits, just one year after the company raised the price of its Premium subscription plans for the first time in its history.
The Swedish audio streaming platform reported an operating income of 266 million euros (approximately $289 million) for the second quarter, compared to a loss of 247 million euros (about $268 million) during the same period last year. The number of monthly active users increased by 14% year-over-year, reaching 626 million.
CEO Daniel Ek expressed enthusiasm about Spotify’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 an increase in prices for Premium users in the U.S. Starting this month, individual plans will see an increase of $1 to $12, Duo plans will increase by $2 to $17, and Family plans will rise by $3 to $20. This price hike marked the first increase in membership costs in 13 years, with an average rise of $1 last July.
Despite the price adjustments, Spotify gained seven million net subscribers in the quarter, exceeding its earlier forecasts by one million.
As the world’s leading audio streaming service, Spotify’s users are less likely to cancel their memberships compared to users of other audio or video streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial track record has not always been strong. In 2022, the company’s stock lost over two-thirds of its value as it experienced multiple quarters of operating losses. In January 2023, Spotify laid off 600 employees, and less than a year later, it reduced its workforce by 1,500 jobs, equating to about 17% of its total staff.