Count YouTube as one of the winners of the 2024 election. During Alphabet’s fourth quarter of 2024, YouTube reported that its ad revenue grew 13.8% year-over-year. By the end of the quarter, YouTube’s revenue was $10.47 billion, compared to the $9.2 billion the platform saw in 2023, marking the largest quarter in its history.
This boost was primarily due to strong ad spends tied to the U.S. election. Combined spending on the platform from both Republicans and Democrats almost doubled the ad spends YouTube saw during the 2020 campaign. Alphabet’s continued focus on AI, which allows the platform to do a better job recommending videos to users, also contributed to this quarter’s growth.
Those results mark YouTube’s best quarter in terms of ad sales ever. Previously, YouTube’s best quarter happened during the fourth quarter of 2023, which saw the division bring in $9.2 billion in ad revenue. That was followed by the third quarter of 2024, at $8.92 billion.
Alphabet also recorded growth across its net income and revenue. In a statement, CEO Sundar Pichai credited the strong performance to the company’s focus on artificial intelligence as well as its “momentum across the business.”
Here are the key takeaways:
Net Income: Grew 28% year-over-year to $26.5 billion for the quarter. Overall, net income for 2024 grew nearly 36% to $100.1 billion
Earnings Per Share: $2.15, compared to $2.12 per share expected by analysts surveyed by Zacks Investment Research
Revenue: Grew 12% year-over-year to $96.5 billion for the quarter. Overall, revenue for 2024 grew nearly 14% to $350 billion
YouTube Ad Revenue: Grew 13.8% year-over-year to $10.47 billion compared to $9.2 billion in 2023
Google Subscriptions, Platforms and Devices: Grew 7.8% year-over-year to $11.6 billion
YouTube’s entertainment dominance is nothing new. In 2024, global viewers streamed over 1 billion hours of content daily from their living rooms. Watch time for sports content also grew 30% year-over-year, and viewers watched over 400 million hours of podcasts monthly from their TVs. In fact, Edison Podcast Metrics found in November that YouTube was bigger for podcasts than Spotify and Apple.
As for YouTube Shorts, the monetization rate for the social media platform compared to in-stream viewing grew by more than 30% in America. Shorts viewership on connected TVs accounted for 15% of overall viewing time during the quarter, continuing a trend of more viewers accessing YouTube and its products at home. “We expect to make additional progress in 2025. We’re making it easier for advertisers to benefit from Shorts on all screens,” Philipp Schindler, Google’s Chief Business Officer, said during the company’s earnings call.
But, predictably, the crux of Alphabet’s fourth quarter earnings report had to do with AI. During the earnings call, Pichai noted that when it came to 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, on the cloud and YouTube.”
He also emphasized that that the company will “continue bringing AI in more powerful ways,” keeping in line with the company’s promise to invest more in the space in 2025.
“As we have indicated, the metrics look great, and we are obviously trading on that experience, bringing better and better models, expanding to the number of queries where it works, and so on. But there’s a lot more to come,” Pichai said. “Part of the reason we are so excited about the AI opportunity is we know we can drive extraordinary use cases because the cost of actually using it is going to keep coming down, which will make more use cases feasible.”
However, the company does have some points of concern as it closes out fiscal year 2024 and enters 2025. The China-based AI company DeepSeek has proven to be a problem for any company in the artificial intelligence space. Additionally, the company continued to face antitrust litigation during its fourth quarter of 2024 as the Department of Justice called for Google to divest its Chrome browser in November. This came in the wake of an August ruling that stated the company has a monopoly on the search market.
In the coming months, Google is also expected to cut employees in its Platforms and Devices unit and has already started offering buyout options. That unit includes more than 25,000 full-time employees who work across Android, Chrome, ChromeOS, Fitbit, Google Photos, Google One, Nest, and Pixel. The expected cuts come as Google continues to prioritize AI.
