Internet video giant YouTube larded its coffers with $7.95 billion in ad revenue for third quarter of 2023, representing a 12.5% year-over-year increase, as parent Alphabet overall topped Wall Street forecasts.
Analysts had projected YouTube advertising revenue to come in at $7.81 billion for the quarter, per FactSet. The stronger-than-expected results come after YouTube fell short of expectations in the year-ago period, when ad revenue dropped 1.9%.
Alphabet reported $76.69 billion in total revenue (up 11%) and net income of $19.69 billion ($1.55 per share) for the period ending Sept. 30, reflecting a healthy bump in Google‘s core digital ads business. Wall Street consensus estimates were for $75.97 billion in revenue and earnings per share of $1.45, per to Refinitiv data.
In its earnings reports, Alphabet breaks out only YouTube ad sales. That excludes subscription revenue from YouTube TV, YouTube Premium and YouTube Music, as well as revenue from YouTube’s exclusive multibillion-dollar deal for NFL Sunday Ticket out-of-market games package.
In the last few years, YouTube has faced stronger competition from popular video entertainment app TikTok, which spurred the platform to introduce a copycat feature called YouTube Shorts. More than 2 billion monthly logged-in users now watch Shorts; on average more than 70 billion YouTube Shorts are viewed daily, according to the company. Meanwhile, the company recently said it will shut down Google Podcasts in 2024, as it doubles down on making YouTube Music the preferred destination for podcast creators and listeners.
YouTube is currently led by CEO Neal Mohan (pictured above), who took over the post from Susan Wojcicki earlier this year.
As of Sept. 1, Ruth Porat, formerly the CFO of Alphabet and Google, assumed the new role of president and chief investment officer. She continues to serve as chief financial officer while the company searches for a replacement.
“The fundamental strength of our business was apparent again in Q3,” Porat said in a prepared statement. 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.”
Alphabet’s total headcount during the third quarter dropped 2.4% year over year, to 182,381 employees, after layoffs earlier in 2023.
More to come
