YouTube's Enterprise Valuation: $300-325 Billion
Google does not disclose YouTube’s full segment results, but one can apply quick math to arrive at an Enterprise Valuation (EV) for YouTube. I estimate YouTube’s EV at approximately $300-325 Billion.
YouTube’s Ad business generated revenue of $32 Billion in 2023.
YouTube also generates subscription revenue, although Google does not disclose that figure in its EPS calls or filings. Google generated $15 Billion of subscription revenue in 2023 across its properties. “YouTube is the key driver of our subscription revenues,” said CEO Sundar Pichai on the Q4 2023 EPS call. Let’s assume that YouTube accounted for approximately 75% of Google’s subscription revenue, or approximately $11 Billion.
$32 Billion of Ad revenue plus $11 Billion of subscription revenue = $43 Billion of Total YouTube Revenue.
If one applied Netflix’s 8.3x EV/LTM Revenue multiple to YouTube’s Revenue, it would imply a YouTube Enterprise Value of $357 Billion. However, I do not believe that YouTube deserves Netflix’s valuation multiple given that subscription revenue is higher quality than Ad revenue. Perhaps YouTube deserves a turn lower at around 7x LTM revenue.
