Google hits 350 million paid subs, but YouTube ad revenue is a different story

Alphabet dropped its Q1 earnings yesterday, and the headline number is 350 million paid subscriptions across Google’s services. That’s up from 325 million in Q4 2025, meaning they added 25 million net new subscribers in three months. Not bad for a company that was already sitting on a massive base.

The growth is mostly coming from two places: YouTube Premium and Google One. Google One, the cloud storage plan that now bundles advanced Gemini features, keeps pulling people in. YouTube Premium, the ad-free tier, is also doing its job — maybe too well, depending on how you look at it.

Here’s where it gets interesting. YouTube ad revenue came in at $9.88 billion for the quarter, missing Wall Street’s $9.99 billion estimate. Alphabet’s own CEO Sundar Pichai basically told analysts last quarter this was coming. When users switch from ad-supported YouTube to paid subscriptions, ad revenue takes a hit. It’s a trade-off: less ad money now for more predictable subscription revenue later. Investors are still figuring out how to value that.

Year-over-year, YouTube ads grew 11%, which is fine but not spectacular. The bigger picture is that YouTube’s total annual revenue (ads plus subscriptions) topped $60 billion last year. So the subscription shift isn’t a crisis — it’s a transition. But Wall Street hates surprises, even when they’re telegraphed.

As for Gemini, Google is playing it close to the chest. No subscriber numbers, no monthly active user updates. The last public number was 750 million users, and they didn’t contradict that. What they did share: paid monthly active users in the enterprise segment grew 40% quarter-over-quarter. Vague, but directionally positive. My guess is consumer Gemini adoption is plateauing while enterprise is where the real money is.

Alphabet’s overall revenue hit $109.9 billion, beating expectations. Cloud revenue alone crossed $20 billion, which is the real growth story here. Stock is up. So the YouTube ad miss is a footnote, not a headline.

Still, I’d like to see Google get more transparent about Gemini. They’re happy to shout about 350 million subscriptions, but when it comes to their flagship AI product, we get radio silence. Either it’s growing slower than they’d like, or they’re waiting for a bigger milestone to announce. Either way, the AI wars aren’t being won on subscriber counts alone.