Audio streaming giant Spotify has proven to be a “great business,” and it’s easy to see why it’s become a strong-performing stock, too, CNBC’s Jim Cramer said Tuesday. Shares of Spotify surged 11% Tuesday after the company’s second-quarter earnings report beat Wall Street expectations. Spotify also impressed investors with better-than-anticipated premium subscriptions and operating margins, which also are expected to expand in the current quarter. The Swedish firm posted record free cash flow in the three-month period. The stock reached a 52-week high Tuesday — touching levels not seen since the height of the Covid-19 pandemic — and extended its year-to-date gains to more than 70%. “This is a great business. It’s just a great business, and that’s what people are reacting to,” Cramer said. “Really extraordinary.” SPOT YTD mountain Spotify’s year-to-date stock performance. The audio-streaming platform’s focus on revenue growth and monetization has been paying off. In June, Spotify introduced new subscription plans including a cheaper “Basic Tier” and announced price hikes in several key markets including the U.S. Notably, though, management said the company is seeing less churn — an industry term for the rate at which users cancel a service over a period — in response to this price increase compared with its prior round last year . “It made me think they could have put through an even bigger price increase,” Cramer said. Spotify executives also said the firm’s recent push into audiobooks is driving engagement. To be sure, the company’s total monthly active users of 626 million in the quarter missed estimates of 631.3 million, according to StreetAccount. However, management chalked it up to some lumpiness in developing markets and maintained optimism on the opportunity to attract new users through improved marketing strategies. Looking ahead to the current quarter, Spotify said it expects monthly active users to improve on a sequential basis.