UPDATED with exec comments. Ruth Porat, Alphabet‘s Chief Investment Officer and outgoing CFO, said the company was “pleased with the growth” by YouTube during the second quarter.
Speaking to Wall Street analysts during the company’s quarterly earnings call, Porat said the video platform recorded “healthy watch time growth” and “continued to close the monetization gap with Shorts,” the company’s TikTok rival. (She didn’t offer any specific numbers for those line items.)
There was also “continued momentum in connected TV, with brands benefiting in part from an ongoing shift in budgets from linear television to digital,” she added.
In the third quarter, which ends Sept. 30, Porat noted that comparisons could be tough for YouTube with the same period in 2023. Strength from retailers in the Asia-Pacific region were credited with propelling YouTube in the year-ago frame.
Asked by one analyst about whether YouTube would be able to retake its advantage over Search in terms of overall gains, Porat said she felt the “operational strength” of the platform was intact. She again cited the comparisons and “lapping” of better year-ago results as the main drag on growth.
PREVIOUS: YouTube advertising revenue climbed 13% in the second quarter, reaching $8.663 billion, contributing to better-than expected results at parent Alphabet.
Total revenue reached $84.7 billion, up 14%, and earnings per share hit $1.89.
The revenue and earnings figures both came in ahead of Wall Street analysts’ expectations.
Analysts had called for ad growth of 16% at YouTube, but the miss didn’t appear to alter most investor perception of the quarter. Google shares rose 2% in after-hours trading after the financials were released.
Momentum has been growing at YouTube over the past couple of years, with metrics from Nielsen and others showing the video giant continuing to make gains. Its pay-TV offering, YouTube TV, has also been on the rise, recently passing 8 million subscribers and attracting new customers by virtue of YouTube’s deal with the NFL for Sunday Ticket, which took effect last year.
The traditional media sector is confronting some softness in the advertising business, mainly in the TV upfront, and its streaming efforts have been stymied a bit by a flood of new ad-supported entries into the marketplace. The broader ad sector is improving noticeably as 2024 unfolds, however, with YouTube positioned well to thrive in the current climate. It has even overcome skepticism about its TikTok rival YouTube Shorts, which has come into its own.
“Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud,” CEO Sundar Pichai said in the company’s earnings release. Ruth Porat, President and Chief Investment Officer; CFO noted that Cloud for the first time exceeded $10 billion in quarterly revenues and
$1 billion in operating profit.
