Alphabet adds 25 million paid subscriptions in Q1

Alphabet announced on Wednesday during its first-quarter earnings report that Google added 25 million paid subscriptions over the past quarter. This increase brings the company’s total paid subscriptions across its services to 350 million, up from 325 million in Q4 2025. The growth was driven by subscription plans for YouTube and Google One, the company’s cloud storage and subscription service. Meanwhile, the Gemini chatbot may have more than 750 million users. Within the enterprise market, Google pointed to a 40% quarter-over-quarter increase in paid monthly active users for Gemini enterprise.

Despite this subscription growth, YouTube ad revenue missed expectations from Wall Street (the US financial market and analyst consensus). According to data from CNBC, Wall Street expected YouTube ad revenue to reach $9.99 billion this quarter, but the video service pulled in $9.88 billion. This actual figure of $9.9 billion represents an 11% year-over-year growth compared to the same period last year, though it is a decline from the $11.4 billion in YouTube ad revenue recorded in Q4 2025. Last year, YouTube’s annual revenue topped $60 billion across both ads and subscriptions.

The shortfall in ad revenue highlights a strategic trade-off as users transition to ad-free viewing options. Alphabet CEO Sundar Pichai previously noted this dynamic, stating, “When users switch to a YouTube subscription plan, it has a negative impact on ad revenue.” This shift suggests that consumers are continuing to move from ad-supported YouTube viewing to ad-free subscriptions, impacting ad revenue despite overall growth. This transition has created a complex balancing act for investor expectations regarding YouTube’s growth.

Overall, Alphabet’s stock is up after surpassing Wall Street’s expectations. The company’s cloud revenue topped $20 billion during the quarter, contributing to the overall growth. The key financial highlights from the quarter include:

• Total Revenue: Alphabet reported total revenue of $109.9 billion.
• Cloud Revenue: Cloud revenue topped $20 billion.
• YouTube Ad Revenue: YouTube ad revenue reached $9.88 billion, missing the expected $9.99 billion.

Why it matters

Alphabet is successfully diversifying its revenue streams, but the transition from ad-supported to subscription-based models creates a complex balancing act for investor expectations regarding YouTube’s growth.