Developed $6.86 billion in advertising revenue during the first quarter as the service experienced a drop in growth, falling below Wall Street expectations of $7.4 billion, indicating a 14 percent year over year increase.
During the epidemic, the video streaming platform saw significant growth last year, bringing $28.8 billion in advertising revenue and a year-over-year increase in revenue.
In a letter to analysts, Alphabet CEO Ruth Porat said YouTube witnessed a "pullback in advertiser spending" in Europe due to the Ukraine war, which had an "outsized impact" on the platform's revenue. YouTube also had a "exceptional" first quarter for direct-response advertising, making it difficult to match growth rates experienced at that time.
YouTube has invested more of its resources into YouTube Shorts, a short-form video platform that is viewed as a competitor to TikTok. According to Alphabet CEO Sundar Pichai, the platform now has more than 30 billion daily views. And, as Shorts' viewership increases, Porat is focusing on "closing the gap" with traditional YouTube advertisements.
Alphabet, the parent company of, reported a loss for Q1 with roughly $16.4 billion in net income and $68 billion in total income. Porat also cautioned that the results of the next quarter's findings will imply that Google "sustained the vast majority of [the company's] commercial activities in Russia" in March due to the invasion of Ukraine. According to Porat, the Russian revenue will be primarily driven by advertising.
