• by Laurie Sullivan , Yesterday

YouTube's full-year revenue surpassed $60 billion in 2025, exceeding Netflix's reported revenue of $45.18 billion for the same period, according to Alphabet, which reported earnings on Wednesday.

For the first time, Alphabet broke out revenue for YouTube, which combined advertising and subscriptions. Revenue for YouTube ads rose nearly 9% to $11.38 billion, driven by direct response, but fell short of analysts’ reported expectations of $11.84 billion. The majority of revenue came from subscriptions.

For the fourth quarter of 2025, Alphabet saw revenue rise nearly 18% year-over-year to $113.8 billion, while annual revenue topped $402.8 billion.

Advertising revenue came in at $82.28 billion -- up 13.5% from a year ago.

Artificial intelligence (AI) features in search have led users to engage and interact more.

Gemini 3 has been directly integrated into AI Mode in search, CEO Sundar Pichai said Wednesday on the earnings call, and queries in AI Mode are three times longer than traditional searches.

Pichai said the Gemini AI app now has more than 750 million monthly active users, up from 650 million monthly active users last quarter.

Gemini’s ability to understand intent continues to improve. Pichai also said that a significant number of questions in AI Mode lead to a follow-up question, and nearly one in six queries are non-text based.

The Circle to Search feature is available on more than more than 580 million Android devices.

The company is finding ways to become more efficient, although it committed to capital expenditure between $175 billion and $185 billion this year on AI.

“We were able to lower Gemini serving unit costs by 78% over 2025 through model optimizations, efficiency and utilization improvements," Pichai said. 

Google Cloud also added $17.6 billion in revenue -- up 12.3% YOY -- with an annual run rate of more than $70 billion, driven by demand for AI products across numerous types of customers.