Alphabet reported an increase of 25 million paid subscriptions in the first quarter, bringing its total to 350 million, as growth in YouTube and Google One offset a shortfall in YouTube ad revenue compared with Wall Street expectations.
Subscription Growth Driven By YouTube And Google One
The company said total paid subscriptions rose from 325 million in Q4 2025 to 350 million in the latest quarter. Growth came primarily from YouTube Premium and Google One, which includes cloud storage and bundled services. Access to advanced Gemini features is now included within Google One plans, linking subscription growth with adoption of AI tools.
Limited Disclosure On Gemini User Metrics
Alphabet did not provide updated figures for Gemini subscribers or total monthly active users. The absence of new data suggests usage may remain above 750 million users, consistent with the prior quarter. The company highlighted enterprise adoption, stating that paid monthly active users for Gemini in that segment increased 40% quarter over quarter, though it did not disclose absolute numbers.
YouTube Ad Revenue Falls Short Of Expectations
YouTube generated $9.88 billion in advertising revenue for the quarter, below Wall Street expectations of $9.99 billion, according to CNBC. Despite the shortfall, ad revenue still rose 11% year over year, reaching approximately $9.9 billion compared with $11.4 billion in Q4 2025.
CEO Sundar Pichai had previously indicated that analysts should assess YouTube’s performance using a combination of advertising and subscription revenue. He noted that increased adoption of ad-free subscription plans can reduce ad revenue as users shift away from ad-supported viewing.
Shift Toward Subscriptions Influences Revenue Mix
The company continues to promote ad-free viewing through YouTube Premium, contributing to changes in how revenue is generated. Last year, YouTube reported more than $60 billion in total annual revenue across ads and subscriptions. The latest quarter’s ad revenue performance suggests continued movement toward subscription-based usage.
Overall Revenue And Cloud Performance Support Results
Alphabet reported total revenue of $109.9 billion for the quarter, exceeding Wall Street expectations. Growth included strong performance from its cloud segment, with Google Cloud generating more than $20 billion in revenue.
Following the results, Alphabet’s stock rose as investors responded to overall revenue performance despite concerns around YouTube ad revenue.
Featured image credits: flickr
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