Spotify has reported another quarter of record profits, marking a significant milestone a year after it raised the price of its Premium plans for the first time.
The Swedish audio streaming giant announced an operating income of 266 million euros ($289 million) for the second quarter, recovering from a loss of 247 million euros ($268 million) during the same period last year. Monthly active users also saw a growth of 14%, reaching 626 million.
“This is an exciting time for Spotify. We continue to innovate and demonstrate that we are not only a great product but increasingly a strong business,” stated CEO Daniel Ek. He expressed optimism for the company’s future, noting its performance has exceeded expectations.
Following the earnings announcement, Spotify’s stock surged nearly 14% in pre-market trading on Tuesday.
In June, Spotify revealed it was raising prices for Premium subscribers in the U.S. Starting this month, users on individual plans will pay $12, an increase of $1, while Duo plan users will see a $2 increase to $17, and Family plan users will pay $20, reflecting a $3 increase. This was the first membership cost increase in 13 years, with previous changes made in July when prices rose by an average of $1.
Despite the price hikes, Spotify managed to attract seven million net new subscribers in this quarter, exceeding its guidance by one million.
As the leading audio streaming service globally, Spotify users are reportedly the least likely to cancel their memberships compared to other streaming platforms, according to a Bloomberg analysis.
However, Spotify’s financial journey has not always been smooth. In 2022, the company’s stock value fell by more than two-thirds due to multiple quarters of operating losses. In response, Spotify announced job cuts, laying off 600 employees in January 2023, followed by another 1,500 layoffs, which accounted for about 17% of its workforce, less than a year later.