YouTube Q3 Ad Revenue Growth Slows, Rising 9% to $11.2 Billion, as Alphabet Misses Earnings Estimates

YouTube continued to vacuum up digital ad dollars in the third quarter of 2026, but the video platform grew at slower pace than in recent quarters. Its growth also was lower than Alphabet overall, given a sales boom in the internet giant’s Google Cloud division, which saw revenue double. Meanwhile, Alphabet came in below analyst estimates for Q3 on the top and bottom lines.

For Q3, YouTube ad revenue was $11.2 billion, an increase of 9.2% from the year prior, below analyst projections. That’s compared with growth of 15% in the year-earlier period and 13% in Q2 and 11% in Q1 of this year. Note that in addition to advertising sales, YouTube also generates a massive amount of subscription revenue, which Alphabet said topped $60 billion in 2025.

In the quarter, YouTube surpassed 150 million YouTube Music and Premium subscribers globally, including trials, according to the company.

Overall, Alphabet posted revenue of $127.6 billion (up 25%) and net income of $26.17 billion (down 25%), translating to earnings per share of $2.12. That fell short of Wall Street consensus estimates of $128.2 billion in revenue and EPS of $3.02, per LSEG data.

“We had a strong quarter and are now on a half-trillion dollar revenue run rate,” Sundar Pichai, CEO of Google and Alphabet said in announcing the earnings. “Our deep full stack approach is driving momentum across the business, with Alphabet revenues growing 25% year-over year. Our AI investments are driving overall Search query growth, including commercial queries. In fact, our year-over-year query growth rate is the highest it’s been in the last five years.”

In addition, according to Pichai, the Gemini AI app has reached 1 billion users, which he said makes it the fastest-growing product in Google’s history.

Like other AI “hyperscalers,” Alphabet is spending heavily on building out capacity for artificial intelligence applications. In Q2, the company had raised full-year 2026 capex guidance to $195 billion-$205 billion, up from its previous projection of $180 billion-$190 billion, driven by AI data center buildouts.