YouTube executives reported robust growth in key metrics for Q2 2024, driving ad revenue to $8.66 billion, a 13% increase from the same period last year when it earned $7.7 billion.
Ruth Porat, in her final investor call as CFO before assuming the role of Alphabet’s President and Chief Investment Officer, highlighted the platform’s substantial progress in monetizing Shorts, a feature introduced just over a year ago. Sundar Pichai, CEO of Alphabet/Google, noted that Shorts’ views more than doubled during this period.
The decision to monetize Shorts marked a significant shift for YouTube, which previously faced challenges as viewers migrated to Shorts, an ad-free format, reducing ad revenue from traditional long-form content around Q1 and Q2 of 2022.
Since enabling Shorts monetization on Feb. 1, 2023, YouTube has consistently seen quarter-over-quarter growth in ad revenue, culminating in a record high of $9.2 billion in Q4 2023 during the holiday season rush.
YouTube’s ad revenue over the last two years illustrates this trajectory:
– Q2 2022: $7.34 billion
– Q3 2022: $7.07 billion
– Q4 2022: $7.96 billion
– Q1 2023: $6.69 billion
– Q2 2023: $7.7 billion
– Q3 2023: $7.9 billion
– Q4 2023: $9.2 billion
– Q1 2024: $8.1 billion
– Q2 2024: $8.66 billion
Alphabet’s SVP and Chief Business Officer, Philipp Schindler, emphasized the significant improvement in Shorts monetization, particularly in the U.S. However, specific revenue figures for Shorts versus long-form content were not disclosed.
While YouTube did not provide detailed figures on increased watch time, Schindler mentioned a 14% quarterly growth in Alphabet’s subscriptions sector, driven by strong YouTube subscriptions. Yet, exact subscription figures were not disclosed.
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Porat also noted the platform’s momentum in connected TV, benefiting from a shift in advertising budgets from traditional linear television to digital platforms. Specific revenue metrics for this sector were not provided.
Despite the positive growth, YouTube fell short of analysts’ expectations of $8.9 billion in revenue, leading to a 4.6% decline in Alphabet’s share prices post-earnings call. Nonetheless, Alphabet reported total revenue of $84.7 billion for the quarter, a 14% year-over-year increase, with earnings per share reaching $1.89, surpassing analyst projections.
