YouTube advertising revenue clocks $10.47 billion in Q4; Parent-firm Alphabet's AI investments rise

Google-parent Alphabet reported its fourth-quarter results that missed on revenue expectations and announced more artificial intelligence investments.

Revenue: $96.47 billion YouTube advertising revenue: $10.47 billion Google Cloud revenue: $11.96 billion Traffic acquisition costs (TAC): $14.89 billion

Alphabet’s overall revenue grew nearly 12% year over year, compared to more than 13% growth in the same quarter last year. The company’s revenue growth, as well as growth for its search business, its YouTube ads business and its services unit were all slower compared to a year ago.

Google’s advertising revenue growth was 10.6%, compared to 11% a year ago. Search revenue growth was 12.5%, compared to 12.7% in the fourth quarter of last year. YouTube ads revenue growth was 13.8% compared to 15.5% a year ago, and growth for the company’s services business was 10.2%, compared to 12.4% a year ago.

The company also announced that it plans to invest $75 billion in capital expenditures in 2025 as it continues to expand on its AI strategy. The company’s fourth-quarter net income increased more than 28% to $26.54 billion from $20.69 billion a year prior. Alphabet also reported cloud revenue at $11.96 billion during the quarter.

CEO Sundar Pichai's comments:

"We delivered another strong quarter in Q4, driven by our leadership in AI and our unique full stack approach.

We’re making dramatic progress across compute, model capabilities, and in driving efficiencies. We’re rapidly shipping product improvements, and seeing terrific momentum with consumer and developer usage. And we’re pushing the next frontiers, from AI agents, reasoning and deep research, to state-of-the-art video, quantum computing and more. The company is in a great rhythm and cadence — building, testing and launching products faster than ever before. This is translating into product usage, revenue growth and results.

In Search, AI Overviews are now available in more than 100 countries. They continue to drive higher satisfaction and search usage. Meanwhile, Circle to Search is now available on over 200 million Android devices.

In Cloud and YouTube, we said at the beginning of 2024 that we expected to exit the year at a combined annual revenue run rate of over $100 billion. We met that goal and ended the year at a run rate of $110 billion dollars.

We are set up well for continued growth."