Spotify Technology SA posted a profit for third-quarter revenue as the music streaming company added more-than-expected subscribers to its premium service, sending its shares up 12%.
The Swedish company said its number of premium subscribers had risen by 26 million in the past year to 113 million at the end of September.
Spotify said in a letter to shareholders it was adding roughly twice as many subscribers per month as tival Apple.
However, lower-than-expected addition of new subscribers in the second quarter had led to concerns that rivals might be gaining on Spotify, particularly in countries where Spotify faces home-grown competitors.
Spotify said it had also reduced artist marketing and research and development costs in the quarter, contributing to the surprise profit.
The world’s most popular music streaming service forecast fourth-quarter total premium subscribers of 120 million to 125 million.
The company expects its broader measure of monthly average users to grow to between 255 million and 270 million in the current quarter.
Net income attributable to shareholders rose to 241 million euros for the third quarter.
Revenue rose 28% to 1.73 billion euros ($1.92 billion) for the three months ended Sept. 30.
The world’s largest paid music service is spending to maintain its lead over Apple and Amazon, and the company cited data that indicates it is growing more quickly than either company. Spotify is adding twice as many subscribers per month as Apple, and more users in total than Amazon.
Spotify is also looking to boost usage of its app at home using podcasts. The Stockholm-based company redesigned its app to boost listenership of non-music programming, and spent about $400 million to acquire podcasting companies this year.