YouTube ad revenue increased by double digits in the second quarter, helping parent Alphabet beat Wall Street estimates.
Total revenue for the period ended June 30 climbed 14% over the year-ago quarter to reach $96.4 billion, while diluted earnings per share also rose to $2.31. Both metrics exceeded Wall Street analysts’ consensus forecasts.
Advertising on YouTube increased 13% to $9.8 billion. CEO Sundar Pichai saluted the division’s “strong performance” in the tech giant’s earnings release.
Despite all of the upbeat news, shares in Alphabet sold off more than 1% in after-hours trading as investors pondered a key number in the earnings report. The company said it was increasing its capital spending target to $85 billion, citing the need to build out services featuring AI. Pichai said the company’s management team is “excited by the opportunity ahead,” but some investors are wary of the arms race now seeing major tech firms spending hundreds of billions of dollars a year.
YouTube, which recently marked its 20th anniversary, has been on a roll lately. It hit an all-time high in June of 12.8% of all viewing on U.S. TV screens, according to Nielsen most recent breakdown of tune-in by distributor. The 2.8% margin between YouTube and runner-up Disney was the biggest since began the distributor rankings in May 2024.
The streaming video platform has also prospered as a pay-TV provider, surpassing 8 million subscribers on YouTube TV, though there have been signs of a cooling off of that business. Wall Street analyst Craig Moffett recently estimated that the service lost 500,000 subscribers in the first quarter of 2025 after the second price hike in less than two years took effect.
Even if pay-TV momentum has stalled, YouTube Music and YouTube Premium combined reached a notable milestone with 125 million global subscribers. Given the volatility in the ad market, the various subscription offerings give YouTube and its corporate parents valuable alternatives for generating revenue.