Spotify bet on podcasts. It’s working

Spotify recently redesigned its app to focus on podcasts. That’s paying off big time.

The number of people listening to podcasts on the streaming service jumped nearly 40% compared to the previous quarter, a highlight of Spotify’s strong third-quarter earnings report.

Roughly 500,000 podcast titles are now hosted on the platform. The United States is Spotify’s largest market for listening to podcasts, and it’s also growing across Europe. Podcasts are “clearly a growing global phenomenon,” Spotify said.

The company cautioned that some of the increases in subscribers are “almost too good to be true,” that it’s working to “clean up the data to prove causality, not just correlation.”

Spotify also said that podcast listeners are more likely to upgrade from the ad-supported tier to a paid subscription.

Indeed, the number of paid subscribers increased more than analysts’ expectations, from 108 million to 113 million. An array of new paid plans, like one for families and another for students, helped fuel growth. Spotify broke the 100 million paid subscriber barrier in April.

In total, the number of monthly users grew 30% year-over-year to 248 million global users, the company said.

Spotify is holding its own against its competitors, including Apple and Amazon. The company claims it’s adding double the number of users compared to Apple, and that it has more users than Amazon.

Apple and Amazon do not regularly disclose how many users their music services have. Apple CEO Tim Cook said earlier this year that Apple Music had more than 50 million subscribers. Neither company immediately replied to CNN Business’ request for comment about Spotify’s claims.

The company’s quarterly revenue grew 28% to $1.9 billion. Spotify shares jumped 18% in Monday trading. The stock is now up 25% for the year.