YouTube Q3 ad revenue rises 9% to $11.2bn as Alphabet misses estimates, shares fall

Mixed · 2Alphabet reported third-quarter 2026 revenue of $127.6 billion, up 25% from a year earlier, and YouTube ad revenue grew about 9% to $11.2 billion. 1 2 Left · 1Variety put YouTube's ad growth at 9.2%, below analyst projections and slower than the 15% of the year-earlier period and the 13% in Q2 and 11% in Q1 of this year it cited, and slower than Alphabet overall. 3 Left · 1The Hollywood Reporter said ad sales rose from $10.3 billion a year ago and were on par with Q2. 4

Mixed · 2CEO Sundar Pichai said YouTube Music and Premium have passed 150 million subscribers globally including trials, up from 125 million disclosed previously. 1 4 Mixed · 2Alphabet missed Wall Street expectations, though outlets cite different consensus figures: Variety reported $128.2 billion revenue and EPS of $3.02 per LSEG, while Deadline reported a $127.8 billion forecast and EPS of $2.12 against $3.01 expected. 3 1 Centre · 2Shares fell in after-hours trading: CNA reported a drop of more than 6%, while Deadline said 8%. 5 1

Centre · 1Google Cloud revenue more than doubled to $30.71 billion, beating the analyst average of $29.57 billion, according to LSEG data cited by CNA. 6 Centre · 1Alphabet's free cash flow was negative $9.07 billion against an analyst estimate of a $36 million burn, as it spends heavily on cloud capacity. 5 Centre · 1CNA, citing LSEG data, said the negative free cash flow was the first in Alphabet's 22 years as a public company and compared with a $5.9 billion burn in the prior quarter; it also reported a $7.66 billion operating loss in "Alphabet-level activities", which Alphabet said mainly reflected AI research and development costs. 7

Centre · 1CNA said the revenue miss came from Google's core advertising business, which reported $82.01 billion, about $1.41 billion short of expectations. 7 Left · 1Variety noted that Alphabet had raised full-year 2026 capex guidance to $195 billion-$205 billion in Q2 for AI data centre buildouts. 3 Left · 2Pichai called it a strong quarter and said Search query growth, including commercial queries, was the highest in five years; he also said the Gemini app reached 1 billion users. The Verge put Search and other revenue up 12%. 3 2

Centre · 1Anadolu Agency, citing Alphabet's statement, reported operating income up 30% to $40.6 billion (31.8% margin) but net income down to $26.5 billion from about $35 billion and diluted EPS of $2.12 versus $2.87, with a $8.2 billion net loss in other income and expenses including $8.7 billion of losses on equity securities. 8 Centre · 1By segment, Google Services revenue rose 11% to $96.3 billion, Search and other rose 12% to $63.4 billion, subscriptions, platforms and devices reached $14.3 billion, Google Cloud operating income rose to $11.1 billion from $3.6 billion, and Other Bets had an operating loss of $2 billion, according to Anadolu. 8 Centre · 1TechCrunch noted Search growth has decelerated, from 19% in Q1 and 17% in Q2 to 12% in Q3, and reported that Google is expanding ads in AI Mode and AI Overviews to international markets, with chief business officer Philipp Schindler saying click-through rates for sponsored product listings in AI Mode are comparable to organic listings. 9

Centre · 1Deadline added that YouTube accounted for almost 16% of US TV-screen viewing in September, per Nielsen. 1