Spotify Technology SA shares surged 16% to $314.80, marking the largest intraday increase since July 2022, after the audio-streaming giant reported a first-quarter profit and strong growth in subscriber numbers. The Swedish company’s paid subscriber base grew by 14% year-on-year to 239 million, aligning with analysts’ expectations. This impressive growth comes as Spotify continues to expand its offerings and introduce new features, attracting more users to its platform.

The total number of active users, including those on ad-supported plans, reached 615 million, slightly below analysts’ projections of 617.9 million. Despite this, Spotify’s revenue rose 20% to 3.6 billion euros ($3.8 billion), with a net income of 197 million euros. The adjusted operating profit stood at 168 million euros, a record high for the company.

Spotify’s Business Model Evolution

Spotify is shifting its business model to extend beyond music streaming, delving into other audio entertainment categories such as audiobooks. After years of rapid subscriber growth, the company raised prices last year for the first time in more than a decade, with plans for another price hike by the end of this month. The company is also experimenting with new pricing tiers, including a lower-priced plan without audiobooks and a music-only option.

Spotify has been expanding its audiobook offerings, with 25% of users who have access to the feature having clicked the play button at least once. This move comes as the company undergoes restructuring, reducing its staff and podcast programs. However, Spotify recently renewed its deal with comedian Joe Rogan and began publishing his shows more broadly on YouTube and Apple Podcasts.

Despite Spotify’s strong growth, its forecast for the second quarter fell slightly below analysts’ expectations. The company expects 631 million active users, including 245 million premium subscribers, compared with analysts’ forecast of 637.1 million. Nevertheless, Spotify’s projected sales of 3.8 billion euros and expected operating profit of 250 million euros exceeded analysts’ forecasts, signaling a positive outlook for the audio-streaming giant.

For more details on Spotify’s first-quarter earnings and future projections, check out the original report from Bloomberg.