Alphabet dropped its Q1 earnings report on Wednesday, and buried inside is a number that tells you a lot about where Google’s headed: 350 million paid subscriptions across its services, up from 325 million at the end of 2025.
That’s 25 million new subscribers in three months. Not bad for a company most people still think of as “the free search engine.”
YouTube and Google One are doing the heavy lifting.
Google One, which bundles cloud storage with access to advanced Gemini features, is clearly resonating. The AI perks are a smart hook — you get storage, sure, but you also get Gemini Advanced, which is Google’s way of making that subscription feel essential rather than optional. I’ve been saying for a while that bundling AI into existing products is Google’s strongest play, and this quarter backs that up.
What’s missing from the report is any solid Gemini subscriber or MAU number. Google didn’t offer one, which is telling. The last known figure was 750 million monthly active users, and that was from the prior quarter. If that number had jumped significantly, you’d think they’d mention it. My guess? Gemini’s growth is steady but not explosive at the consumer level, and Google is leaning harder on enterprise adoption — they did note a 40% quarter-over-quarter increase in paid monthly active users there. But again, no hard number. Frustrating, but typical.
YouTube ad revenue missed expectations, and that’s actually a good sign.
Wall Street wanted $9.99 billion in YouTube ad revenue. Google delivered $9.88 billion. Missed by about $110 million. Analysts fretted, but the reality is more nuanced.
Sundar Pichai warned last quarter that you can’t look at YouTube’s ad revenue in isolation anymore. When users switch to YouTube Premium (ad-free), ad revenue drops — but subscription revenue goes up. That’s exactly what’s happening. YouTube’s total annual revenue topped $60 billion last year across ads and subscriptions. The shift from ad-supported to subscription-supported is real, and it’s accelerating.
I actually think this is healthier for YouTube long-term. Ad revenue is volatile, dependent on macroeconomic cycles and advertiser whims. Subscription revenue is sticky. Google should be transparent about the blended numbers, but they’re not there yet.
The rest of Alphabet is doing fine.
Revenue hit $109.9 billion, beating expectations. Cloud revenue alone topped $20 billion, which is a big milestone. Stocks are up. The subscription growth is a nice narrative to hang the earnings on, but the real story is that Google’s cloud business is finally pulling its weight.
Still, I wish they’d give us more detail on the subscription breakdown. How many are YouTube Premium vs. Google One vs. YouTube TV? The 25 million net adds is impressive, but it’s a headline number. The real interesting stuff is in the mix.
We’ll hear more on the earnings call, but for now, the takeaway is simple: Google is quietly building a subscription business that rivals many media companies, and they’re doing it by bundling AI, storage, and ad-free video into something people are willing to pay for.
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