YouTube ads top $10B as AI drives surge
YouTube’s ad revenue rose 15 percent year-over-year in the third quarter of 2025, reaching $10.26 billion—the highest third-quarter total ever. Alphabet CFO Anat Ashkenazi attributed the growth to direct response advertising, followed by brand advertising.
The company’s subscriptions, platforms, and devices segment, which includes YouTube Premium, YouTube Music, and YouTube TV, posted a 21 percent revenue increase to $12.9 billion. Alphabet CEO Sundar Pichai noted that total paid subscriptions across Google surpassed 300 million during the quarter, led by YouTube Premium and Google One. As of March, YouTube reported 125 million paid Music and Premium users globally, up from 50 million in mid-2021.
YouTube Shorts now generates more revenue per watch hour than traditional in-stream videos in the U.S. However, Alphabet warned that fourth-quarter ad revenue will likely dip due to high spending on the 2024 U.S. elections.
AI is accelerating growth across Google, Pichai said, helping creators with video tools, editing, and monetization—including the auto-identification of products to make videos shoppable. Chief Business Officer Philipp Schindler emphasized that paid subscribers deliver significantly higher gross profit than ad-supported users, though Google continues to pursue both revenue streams.
YouTube paid $8 billion to music rightsholders from July 2024 to June 2025, nearing Spotify’s $10 billion in 2024 royalties. YouTube Global Head of Music Lyor Cohen called this progress part of a long-term effort to support artists and creators worldwide.
