YouTube Ad Sales Approach $8B as Alphabet Momentum Grows

YouTube’s advertising revenue reached $7.95 billion in the three months ended Sept. 30, continuing the upward momentum started in the previous quarter.

In the second quarter, the video platform reported $7.7 billion in advertising revenue, reversing the downward trend of the previous quarters. The Q3 result of $7.95 billion also bests the results of the third quarter of 2022, when YouTube reported $7.1 billion in ad revenue.

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The YouTube advertising numbers do not include subscription revenue from YouTube TV, YouTube Premium, YouTube Music, or the recently launched YouTube TV’s NFL Sunday Ticket package. However, the “Other Revenues” segment reached $8.3 billion, up 21 percent year-over-year, driven by subscriber growth in YouTube TV, followed by YouTube Music premium. The NFL Sunday Ticket revenues as well as content acquisition costs are expected to be more fully reflected in the fourth quarter, said CFO Ruth Porat.

While the company did not break out exact figures for NFL Sunday Ticket, Alphabet CEO Sundar Pichai said that it was “receiving excellent reviews,” particularly around its multi-view feature.

“We have heard positive feedback from our partners at NFL about the new features and live stream reliability. This is a clear example of our ability to execute big partnerships with excellence and at scale,” Pichai said on the earnings call.

Added Porat, “We expect to generate an attractive return over the life of the deal. We’re continuing to invest in support of this and excited about the additional opportunities that come out of it working with partners to deliver clips and other opportunities.”

Pichai added that YouTube saw “solid momentum” in its advertising and subscription businesses in Q3, while Porat said the company had seen a “stabilization in spending by advertisers” compared to last year.

Overall, in the third quarter, Alphabet, which is the parent company to YouTube, reported revenue of $77 billion, up 11 percent year-over-year, and net income of $19.7 billion, or $1.55 per share, compared to $13.9 billion, or $1.06 per share, a year ago.

“I’m pleased with our financial results and our product momentum this quarter, with AIdriven 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,” Pichai said.

In January 2023, the company announced layoffs of about 12,000 employees, which led to employee severance and related charges of $86 million and $2.1 billion for the three and nine months ended Sept. 30, 2023, respectively.

Alphabet also says it is taking exit charges as it seeks to “optimize” its global office space of $16 million for the three months ended Sept. 30 and $649 million over the nine-month period.

More to come.

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