Spotify announced another successful quarter, achieving record profits just one year after increasing prices for its Premium subscription plans for the first time.
The Swedish audio streaming platform reported an operating income of 266 million euros ($289 million) in the second quarter, a significant recovery from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also saw a boost, growing by 14% year-over-year to reach 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 hike for its Premium users in the U.S., which took effect this month. Individual plan users will see a $1 increase to $12, Duo plan subscribers will pay $2 more for a total of $17, and Family plan users will face a $3 increase, bringing their total to $20. This marked the first price increase in 13 years, following an average $1 rise in membership costs last July.
Despite the recent price adjustments, Spotify successfully added seven million net subscribers during the quarter, exceeding its earlier guidance by one million.
Spotify remains the leading audio streaming service globally, with users showing a lower likelihood of canceling their memberships compared to other audio and video streaming platforms, according to a Bloomberg analysis.
However, the company’s financial path has been rocky. In 2022, Spotify’s stock plummeted by over two-thirds as it endured multiple quarters of operating losses. In January 2023, the company announced a workforce reduction of 600 employees, and less than a year later, it made a further reduction of 1,500 jobs, accounting for about 17% of its total staff.