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YouTube’s living room TV viewership now brings in one-third of its ad revenue

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YouTube’s living room TV viewership now brings in one-third of its ad revenue

YouTube clocked $11.2 billion in ad revenue in Q3 2026, a 9% year-over-year rise. It’s also reached a record-high number of Premium and Music subscribers–150 million people.

The company’s stock sank 10% after Q3 earnings missed both revenue and profit expectations, and revealed that for the second quarter in a row, hefty AI spending has kept cash flow in the negative.

Alphabet posted revenue of $127.6 billion, compared to analysts’ expected $128.2 billion, and reported negative cash flow of $9.07 billion.

You may remember that Alphabet’s Q2 earnings cast a pall: It posted negative cash flow for the very first time since Google went public in 2004. Analysts expected it would come nearer to breaking even in Q3, but instead, cash burn worsened. At -$9.07 billion, it’s wrapping up Q3 with capex $5.9 billion further into the red than they were in Q2.

And things are only going to get worse. Anat Ashkenazi, Alphabet’s Chief Financial Officer, told investors Alphabet “continue[s] to expect our CapEx to increase significantly in 2027” as it pays for everything associated with AI, including R&D and building out more cloud computing capacity.

He pointed to deeper brand partnerships between Google and advertisers as the “largest contribution” to ad growth, and gave a nod to YouTube Shopping’s partnership with Amazon–the latest component of YouTube’s many-years-in-the-making attempt to turn itself into an ecom hub.

“Our YouTube Creator Partnerships program connects brands with over 3 million creators to drive highly effective campaigns. Brands like Lexus continue to partner with creators like Colin and Samir, driving an 11% lift in brand consideration,” Schindler said.


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