Alphabet dropped its Q1 earnings report on Wednesday, and the headline number is 25 million new paid subscriptions across Google’s services. Total is now 350 million, up from 325 million in Q4 2025. YouTube and Google One are the engines here, which isn’t surprising given how aggressively Google has been bundling its perks.
What’s missing from the report is any hard number on Gemini subscribers or monthly active users. Google didn’t offer a figure, which feels like a deliberate sidestep. The last public number was 750 million users, and that was from the prior quarter. My guess is they’re holding that steady, but without data, it’s hard to tell if Gemini is plateauing or just not worth bragging about yet. The one concrete metric they did share: a 40% quarter-over-quarter increase in paid monthly active users for Gemini in the enterprise market. No raw number, just the percentage. Classic Google opacity.
Google One plans now bundle advanced Gemini features, which is probably why those subscriptions are growing. Makes sense—cloud storage is a sticky product, and adding AI tools makes it more compelling. But the lack of transparency on Gemini’s overall user base feels like a signal that consumer adoption isn’t where they’d hoped.
The more interesting tension is on the YouTube side. Ad revenue came in at $9.88 billion, missing the $9.99 billion Wall Street expected. That’s a $110 million miss. Not catastrophic, but investors hate missing expectations. Alphabet CEO Sundar Pichai warned last quarter that YouTube’s business model is shifting: as more users opt for ad-free YouTube Premium, ad revenue takes a hit. That’s exactly what’s happening. YouTube Premium subscriptions are growing, and each conversion pulls a viewer out of the ad pool.
YouTube’s total annual revenue (ads plus subscriptions) topped $60 billion last year, and Q4 2025 alone brought in $11.4 billion from ads. This quarter’s $9.9 billion is still up 11% year-over-year, so it’s not a collapse. But the trajectory is clear: subscriptions are cannibalizing ads, and that’s going to keep putting pressure on the ad revenue line. Google needs to convince investors that the subscription growth offsets the ad decline, and that the combined business is healthier. I’m not fully sold yet—subscriptions have lower margins than ads, and the churn risk is real.
Alphabet’s overall revenue hit $109.9 billion, beating expectations, and cloud revenue crossed $20 billion for the first time. That’s the real bright spot. Cloud is where the margin expansion is, and it’s growing faster than the core ad business. The stock is up on the earnings beat, so the market is forgiving the YouTube ad miss for now.
Still, the subscription number is impressive. 25 million new paid users in a quarter is no small feat. But the real story is the structural shift happening inside YouTube, and whether Google can manage the transition from ad-supported to subscription-driven revenue without spooking investors. The next few quarters will tell.
Comments (0)
Login Log in to comment.
Be the first to comment!