YouTube advertising revenue increased 12% to $7.95 billion in the third quarter compared with the same period a year ago, helping corporate parent Alphabet beat Wall Street expectations.
Total revenue rose 11% over the year-earlier quarter to hit $76.7 billion, while earnings per share surged to $1.55 from $1.06. Wall Street analysts had estimated revenue of $71.6 billion and EPS of $1.36.
More from Deadline
Despite the results coming in well above forecasts, Alphabet shares slipped more than 5%. They came into earnings up 59% this year to date.
The main flaw in the earnings report that was seized upon by investors was the performance of Alphabet’s cloud business. It undershot Wall Street estimates, reaching $8.41 billion in revenue compared with forecasts for $8.6 billion.
CEO Sundar Pichai touted “product momentum” in the earnings release, specifically artificial intelligence enhancements to Search, YouTube, Cloud, Pixel devices and other areas. “We’re continuing to focus on making AI more helpful for everyone; there’s exciting progress and lots more to come,” he said.
Ruth Porat, President and Chief Investment Officer, called out “meaningful growth in Search and YouTube, and momentum in Cloud.”
Overall advertising revenue came in at $59.7 billion, ahead of consensus estimates of $58.9 billion. Alphabet and Facebook parent Meta are considered important indicators of the shape of the ad market. Meta will report its quarterly results on Wednesday.
YouTube is continuing to rebuild after a difficult 2022, which saw the digital video giant post its first ad decline in its history. The company also has shuffled its CEO, with Neal Mohan taking over for Susan Wojcicki earlier this year.
Best of Deadline