Earnings: YouTube revenue lagged in Q4 while Amazon forged ahead

YouTube delivered the most significant underperformance versus WARC’s Q4 2025 benchmark, missing forecasts by 9.3 percentage points. While the result appears disappointing on the surface, there were several compounding factors at play, the researchers emphasise. 

“The fourth quarter in 2024 benefited heavily from political advertising spend during the US Presidential Election. This had been factored into WARC’s projection for the quarter, though the degree to which the cooling off occurred was notably more marked.” 

According to the report, engagement with YouTube remains strong overall, but conventional in-stream advertising may not provide the future growth engine.  

YouTube Shorts – a format developed to counter consumption on TikTok and Instagram – now average more than 200-billion daily views. In several major markets, including the US, revenue per watch hour has overtaken that of traditional in-stream formats.  

Shorts still contribute a relatively small share of overall ad revenue; monetisation frameworks for short-form video continue to evolve, meaning rising consumption is not yet translating into proportional revenue growth for YouTube. 

Further, new data indicates that approximately a third of YouTube’s total revenue – some US$20-billion – now comes from subscriptions to its YouTube Premium service.  

“Converting free ad-tier users to paid consumption without ads could act as a headwind on ad revenue in the medium term, eroding further points for further growth rates,” WARC says. 

Mixed fortunes for Google as AI disrupts discovery 

Performance within Google’s advertising ecosystem was more mixed. The Google Display Network declined by 1.6% in Q4 2025 and 1.9% during 2025 as whole, in both cases roughly one point behind forecast. This reflected softer pricing and a structural shift in advertiser budgets towards higher-value formats. 

“As spend migrates away from the open web, display’s relative contribution to Alphabet’s bottom line continues to stagnate. The company noted that income from AdSense fell, while AdMob (in-app ads) receipts grew, but not enough to stymie overall decline,” WARC states. 

AdSense is a free programme for website owners (publishers) to earn money by displaying relevant, targeted ads from Google on their sites, with revenue generated from clicks or views. 

Meanwhile, Google Search remains structurally resilient, coming in ahead of forecast during the quarter but roughly par for the full year. Despite intensifying competition from generative AI alternatives, Google’s integration of AI into search experiences appears to be sustaining engagement and query volumes, reinforcing its monetisation advantage. 

You can find out more about the report here.