YouTube’s advertising business continued to power forward in the fourth quarter of 2021, delivering solid growth and surpassing Netflix’s global revenue for the period.
The internet video giant generated $8.63 billion in ad revenue for Q4, an increase of 25.4% year over year, Alphabet (Google’s parent company) reported. Note that doesn’t include revenue from the more than 50 million YouTube Music and YouTube Premium subscribers or YouTube TV. Netflix posted $7.71 billion in Q4 revenue (up 16%).
Overall, Alphabet handily beat Wall Street earnings estimates for the year-end quarter, pulling in $75.33 billion in revenue (up 32%) and posting net income of $20.64 billion (up 36%), or $30.69 per share.
While YouTube’s Q4 ad revenue experienced a slowdown compared with Q3 (which saw 43% YoY growth), the business ended the year with $29 billion in ad revenue, up 46% over 2020.
Wall Street analyst consensus estimates had pegged Alphabet Q4 2021 revenue at $72.13 billion and EPS of $27.32. The stock was up 11% in after-hours trading on the beat.
In announcing earnings, Alphabet revealed that its board of directors approved a 20-for-1 stock split — in the form of a one-time special stock dividend on each share of the company’s stock. Under the stock split, which is subject to stockholder approval, Alphabet stock owners will receive a dividend of 19 additional shares of the same class of stock they hold after the close of business on July 15, 2022.
In Q4, Google’s core search business had revenue of $43.3 billion, up 36%, and Google Cloud grew 45%, to $5.5 billion.
The internet giant’s Q4 revenue growth “reflected broad-based strength in advertiser spend and strong consumer online activity, as well as substantial ongoing revenue growth from Google Cloud,” Ruth Porat, CFO of Alphabet and Google, said in prepared remarks.
Last week, in an update to creators, YouTube CEO Susan Wojcicki boasted that the platform had delivered more than 5 trillion views of YouTube Shorts, the short-form video format popularized by TikTok, since first launching in September 2020. YouTube plans to test new ways for Shorts creators to make money via branded content and shopping deals.
YouTube Shorts continues to average more than 15 billion daily views, after first topping that number last summer, Sundar Pichai, CEO of Alphabet and Google, told analysts on Tuesday’s earnings call.
Wojcicki also wrote that YouTube is looking to expand the ways all creators can make money, including through technologies like nonfungible tokens (NFTs), and she defended YouTube’s decision to hide public “dislike” counts.
Meanwhile, earlier this month YouTube announced that it is winding down its original programming group and that Susanne Daniels, global head of original content, is leaving.
At the end of 2021, Alphabet had about 156,500 total employees, up 16% from 135,301 a year earlier.