Google Hits 350 Million Paid Subs, But YouTube Ad Revenue Misses the Mark

Alphabet dropped its Q1 2026 earnings report Wednesday, and the headline number is 25 million new paid subscriptions across Google’s services. That brings the total to 350 million, up from 325 million in Q4 2025. The growth is coming from two predictable places: YouTube and Google One.

Google One is the cloud storage and subscription bundle that now includes access to advanced Gemini features. So while the earnings report didn’t break out Gemini subscriber numbers or monthly active users, bundling it with a growing product like Google One is a smart move. It hides the weak spots and rides the strong ones.

Speaking of Gemini, the lack of solid numbers here is telling. Google previously claimed 750 million monthly active users for the chatbot, and they didn’t update that figure this quarter. That either means it’s plateaued, or they’re not ready to talk about it. My bet is on the former—the chatbot space is getting crowded, and Google’s offering hasn’t exactly set the world on fire.

What they did highlight is enterprise growth: a 40% quarter-over-quarter increase in paid monthly active users for Gemini in the enterprise market. No hard numbers, but the direction is clear. Businesses are paying for this thing, even if consumers aren’t flocking to it.

Now the messy part: YouTube ad revenue. Wall Street expected $9.99 billion. Google delivered $9.88 billion. That’s a miss, and it’s not a small one in percentage terms. The company pointed out that YouTube ad revenue is still up 11% year-over-year, but the trend is worrying investors.

Sundar Pichai tried to preempt this last quarter by telling analysts they should evaluate YouTube on a combination of ads and subscriptions, not just ads alone. The logic is simple: when users switch from ad-supported YouTube to ad-free YouTube Premium, ad revenue drops. That’s exactly what’s happening. Last year YouTube’s total revenue (ads + subscriptions) topped $60 billion, with Q4 2025 alone bringing in $11.4 billion in ads. This quarter, that figure dropped to $9.9 billion.

It’s a classic cannibalization problem. Google is pushing ad-free viewing as a premium feature, and it’s working—maybe too well for investors who were betting on ad growth. The shift from ads to subscriptions is real, and it’s accelerating.

Overall, Alphabet still beat Wall Street expectations with $109.9 billion in revenue, thanks to healthy cloud growth. Cloud alone topped $20 billion. So the company is fine, but the YouTube ad miss is a signal worth watching. Consumers are voting with their wallets, and they’re choosing to pay to skip ads.

Alphabet’s stock is up after the report, which tells you the market isn’t panicking. But I’d keep an eye on that YouTube ad figure next quarter. If it drops again, the narrative changes.