Alphabet reports $77 billion in ad rev in Q3

On the strength of two of its flagship products, Search and YouTube, Google parent company Alphabet (slightly) reported a 9% increase in their ad revenue, to the tune of $76.9 billion. 

YouTube by itself brought in $7.95 billion in ad revenues for the third quarter, registering a 12.5% Y-o-Y increase, even as industry talking heads had predicted YouTube’s advertising revenue to come to $7.81 billion for the same period, according to FactSet.

However, it should be noted that Alphabet only reveals YouTube ad sales in its earnings reports, which exclude subscription revenues from YouTube TV, YouTube Premium, YouTube Music, and other in-app services.

“I’m pleased with our financial results and our product momentum this quarter, with AI-driven innovations across Search, YouTube, Cloud, our Pixel devices and more. We’re continuing to focus on making AI more helpful for everyone; there’s exciting progress and lots more to come,” said Alphabet CEO Sundar Pichai in a statement accompanying the report.

Despite the positive overall results, Alphabet’s shares fell once it got around that the revenue from Google Cloud (which grew to $8.41 billion during Q3), still fell short of industry expectations.

However, even as its competitors rush towards the same technological adoptions, Google Cloud is probably hoping to benefit from its strong pivot towards AI, given that the service has become a leading option for other companies looking to train their AI tools. It is these new clients that have allowed Cloud to lead a third consecutive quarter in operating profitability.

Ruth Porat, President and Chief Investment Officer at Alphabet and Google, said during the earning call, “The fundamental strength of our business was apparent again in Q3. The Q3 results were “driven by meaningful growth in Search and YouTube, and momentum in Cloud. We continue to focus on judicious capital allocation to deliver sustainable financial value.”