Q1 2025 earnings: Highlights for advertisers

Yesterday, we released our Q1 2025 earnings report to reveal that nearly all of our KPIs were in-line to ahead of guidance, with Monthly Active Users (MAUs) reaching 678M globally (up 10% Y/Y) and subscriber net additions increasing by 5M globally (up 12% Y/Y), significantly outperforming guidance by 3M.

Ad-supported revenue increased 8% Y/Y, driven by growth in sold impressions across music and podcast advertising. Notably, our automated sales channels were the largest contributors to overall advertising growth.

“The underlying data at the moment is very healthy: engagement remains high, retention is strong, and thanks to our freemium model, people have the flexibility to stay with us even when things feel more uncertain,” said Daniel Ek, Spotify Founder & CEO. “So yes, the short term may bring some noise, but we remain confident in the long-term story, and the direction we’re heading in feels clearer than ever.”

Spotify kicked off the new quarter with its first-ever Spotify Advance event in which the company unveiled major updates to its ads business. Here are the highlights from that big day:

1. Advertisers now have the flexibility to buy Spotify in the way that works best for them: via the new Spotify Ad Exchange or Spotify Ads Manager.

For the first time, advertisers can now access Spotify’s engaged, logged-in users via real-time auction with full addressability and measurement capabilities in whatever way works best for them. The Spotify Ad Exchange gives advertisers access to our suite of audio, video, and display formats across music inventory (with podcasts coming soon) via industry-leading DSPs such as The Trade Desk and Google DV360, with Yahoo DSP, Magnite, Adform, and more coming soon. This makes it easier to add Spotify to your omnichannel campaigns and show up alongside our high-quality content, in a nutritional and trusted environment.

Meanwhile, we’ve continued to evolve our self-serve platform, Spotify Ads Manager, with more advanced targeting capabilities like Custom Audience Targeting, new 1P and 3P measurement solutions, and new outcome-based objectives like Website Traffic and App Installs to support full-funnel success. These advancements further demonstrate our commitment to helping advertisers of all sizes create, optimize, and measure their Spotify campaigns with ease and greater control.

2. Advertisers can now leverage generative AI to support audio ad creation in Spotify Ads Manager.

We’re bringing our decades-long AI expertise and creative best practices to our advertising platform to enable partners to create scripts and voiceovers at no additional cost. This makes it even easier to create high-quality, scalable audio ads made for Spotify. Gen AI Ads are now available to advertisers in the US and Canada in Spotify Ads Manager.

3. We improved the addressability of our platform to empower brands, businesses, and advertisers to better measure the impact of their Spotify campaigns.

We’ve rebuilt our first-party measurement stack and expanded tools with key third-party partnerships, enabling advertisers to evaluate performance across the funnel. We’ve enhanced the Spotify Pixel within Ads Manager, and invested in new, industry-leading partners across viewability and mobile app measurement. Plus, we’ve introduced approved third-party tags to offer greater insight into your results.

With the launch of Spotify Ad Exchange, we’re excited to participate in DSP-side targeting and measurement—improving addressability through adoption of identity solutions such as UID 2.0 (The Trade Desk), PAIR (Display & Video 360), and RampID (LiveRamp), with more to come. You can access these 3P measurement tools to measure the impact of your media on Spotify in the context of your cross-channel buys.