Alphabet's consolidated revenue increased 16% to $102.3 billion in the third quarter, with the technology company riding the inter-related waves of AI, search, cloud computing and YouTube.
Alphabet more than doubled its quarterly revenue versus the third quarter of 2020, when it generated $46.17 billion. The most recent Q3 marks the first time ever that Alphabet produced more than $100 billion of revenue in a single quarter.
Part of the picture is YouTube, which continued to expand with its corporate parent during the July through September period. YouTube quarterly ad revenue also surpassed equity analysts’ expectations, reaching $10.26 billion, up 16% YoY. Analysts had expected Q3 ad revenue of around $10.01 billion from YouTube.
During Alphabet’s Q3 earnings webcast, CEO Sundar Pichai specifically called out YouTube’s first live-streamed NFL game, which was exclusive to the platform and took place on September 5 in Sao Paulo, Brazil. The game generated an audience of more than 19 million fans globally and “set a new record for most concurrent viewers of a live stream on YouTube,” he said.
Alphabet management also continued to tout YouTube’s massive connected TV reach and leading position in Nielsen’s monthly share tracker of U.S. TV time. In Nielsen’s latest ranker, released late last week, YouTube captured 12.7% of U.S. TV usage for September.
YouTube Shorts, meanwhile, continues to do well. “In the US, Shorts now earn more revenue per watch hour than traditional in-stream on YouTube,” Pichai said on the earnings call.
As for that other part of what Alphabet calls YouTube’s “twin-engine monetization strategy,” subscriptions, Alphabet didn’t reveal much specifically about virtual pay TV service YouTube TV. But it did say that its broader global subscriptions business has now surpassed 300 million paid customers, led by Google One and YouTube Premium.
The overall theme of Wednesday’s earnings report was once again AI. The new technology helped YouTube offer creators tools meant to make their videos even more sticky and targeted. On the other side, audiences have new, more powerful search-and-recommendation capabilities.
The biggest component to Alphabet’s massive business, Google Search, continues to be transformed into an AI-driven medium, too. That unit expanded overall revenue by 15% YoY in Q3 to $56.567 billion.
Advertising across Alphabet’s businesses — including YouTube and Search — increased by 12.6% to $74.18 billion, well above estimates of $71.79 billion.
Gemini, the company’s most well-known genAI chatbot, continues to grow, and is now up to 650 million active users.
“This is an expansionary moment,” Pichai said, summing up the third quarter.
As Alphabet reported Q3 earnings, Google’s virtual MVPD YouTube TV remains in carriage negotiations with Disney. The media company’s channels, including ABC and ESPN, are set to come off the virtual MVPD if a new deal or extension, temporary or otherwise, can’t be agreed upon before Friday.