Spotify shares rise as much as 18% after turning a surprise profit

Spotify Technology delivered a surprise profit and its stock is reaping the benefits. 

The music streaming company’s shares surged as much as 18% Monday after a better-than-expected rise in premium subscriptions boosted profits.  

Spotify is on track for its best day since its IPO debut April 3, 2018 as long as it closes up more than 12.89%, according to FactSet. It is trading approximately 5.6% above its reference price of $132.

The company said that its number of premium subscribers rose 26 million in the last year to 113 million at the end of September, beating Wall Street’s expectations.

For the third quarter, it reported a net income of 241 million euros ($267.34 million), or 36 cents per share. Analysts were expecting a loss of 29 cents per share.

As a global leader in music streaming services, Spotify outpaces Apple Music in terms of subscribers. For the fourth quarter, the company expects total premium subscribers to be between 120 million and 125 million. It also beat analysts’ estimates on monthly average users, predicting the number of users to grow to between 255 million and 270 million this quarter.

The company also reported cost cuts in artist marketing as well as in research and development which help lift profits. 

– Reuters contributed to this report