YouTube ad sales grew more slowly than expected, and Alphabet stock fell

YouTube's ad business grew more slowly than Wall Street expected, and shares of its parent company, Alphabet, fell more than 10% in after-hours trading. YouTube ads brought in $11.2 billion in the third quarter, up 9% from a year ago. Analysts had expected $11.43 billion.

What changed

Growth also cooled from the quarter before. In that earlier period, YouTube ads brought in about $11.1 billion, a 13% increase from the previous year. YouTube was not the only soft spot. Alphabet missed expectations on its overall revenue too. One area did beat estimates: its cloud business, which rents computing power and software to other companies.

The bright spot

Subscriptions looked better. Alphabet said YouTube Music and Premium now have more than 150 million subscribers, up from 125 million in March 2025. The company also said its subscriptions business is growing faster than ads.

Why TV screens matter

YouTube is not just a phone and laptop habit anymore. Over a third of its third-quarter ad revenue came from the living room, said Philipp Schindler, Google's chief business officer. Recent Nielsen estimates put YouTube's share of US television viewing in August at about twice that of Netflix.

Rivals are taking notice

Other companies want that TV audience. Netflix lowered its full-year ad revenue forecast from $3 billion to $2.7 billion after delays in rolling out its ad products. It also laid off about 1,000 workers earlier this month. This week, Instagram unveiled an overhaul of its long-form video features, which appears aimed at competing with YouTube on TV screens.

Ross Benes, a senior analyst at EMARKETER, put it this way: "Everyone in streaming is chasing YouTube, and even Instagram is going to pivot their strategy based on the success that YouTube's had."

What it means for you

For businesses that advertise online and for creators building an audience, the main change is likely more places to put video. The material does not say why YouTube's ad growth slowed, and it does not say how advertisers will respond. A slower quarter does not mean viewers are leaving. It shows how crowded the race for TV screens has become.