Spotify has announced record profits for another quarter, following a price increase of its Premium plans for the first time last year.
The Swedish audio streaming giant 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) a year earlier. The number of monthly active users rose by 14% year-on-year, reaching 626 million.
CEO Daniel Ek remarked on 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 promising earnings report, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify announced a price increase for its U.S. Premium users, effective this month. Individual plan users will now pay $12 (up from $11), Duo plan subscribers will pay $17 (up from $15), and Family plan users will see their fees rise to $20 (from $17). This was the first membership price hike in 13 years, with last July seeing the average increase of $1.
Despite these increases, Spotify successfully added seven million net subscribers in the quarter, surpassing its earlier guidance by one million.
Spotify remains the leading audio streaming service globally, with its subscribers being the least likely to cancel their memberships, according to a Bloomberg analysis.
However, the company has experienced financial challenges in the past. In 2022, Spotify stock experienced a decline of over 66% as it dealt with several quarters of operating losses. Consequently, in January 2023, the company announced the layoff of 600 employees and later cut an additional 1,500 jobs, representing approximately 17% of its workforce.