YouTube Ad Revenue Growth Slows Dramatically in Q1, Alphabet Misses Expectations

YouTube advertising sales for the first three months of 2022 grew 14%, to reach $6.9 billion — missing Wall Street expectations and representing a major cooling off from the torrid pace the video giant had seen during the COVID pandemic.

By comparison, YouTube’s ad revenue was up 49% in the year-ago period and increased 46% for the full year 2021. Alphabet, the parent company of Google and YouTube, reported total revenue for Q1 of $68.01 billion, up 23%, and net income of $16.44 billion (or $24.62 per share), down 9%. That fell shy of Wall Street expectations on the top and bottom lines.

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Financial analysts on average expected Alphabet to post Q1 revenue of $68.1 billion and EPS of $25.96, per Refinitiv. YouTube ad revenue was projected to hit $7.48 billion in the quarter, according to FactSet.

Shares of Alphabet’s class A stock were down 4.6% in after-hours trading on the miss (after closing down 3.6% in regular trading).

Sundar Pichai, CEO of Alphabet and Google, highlighted strong growth in Google Search and Google Cloud revenue, “which are both helping people and businesses as the digital transformation continues,” he said in announcing Q1 results. “We’ll keep investing in great products and services, and creating opportunities for partners and local communities around the world.”

“Google’s underwhelming results underline the view that the search giant is struggling with slowing revenue growth as advertisers cut back on spending due to a slowdown in consumer demand amid the current inflationary environment,” Jesse Cohen, senior analyst at, commented in a note.

Alphabet ended the first quarter with 163,906 employees, up 17% year over year.