Alphabet’s third quarter marks a turning point: the company has officially entered the era of triple-digit quarterly revenue, powered by a surge in AI-driven products and a cloud platform growing at its fastest pace on record. Google’s advertising engine remains as strong as ever, but what stands out is how deeply AI is now embedded across search, video, productivity and developer tools. The company isn’t just growing with the AI wave — it’s shaping it.
The numbers also highlight a business that has become far more disciplined. Streamlined operations and lower cost intensity lifted margins even as Alphabet continued to invest aggressively in data centers and model training. Google Cloud’s acceleration, paired with rising monetization of generative features, suggests that Alphabet is building an ecosystem where AI is not an add-on, but the core of its next decade.
How was the last quarter?
The third quarter of 2025 delivered unprecedented growthfor Alphabet $GOOG, with revenue growing 16% year-over-year to $102.3 billion. All key segments achieved double-digit growth, confirming that AI innovation continues to drive demand across the entire Google ecosystem. Google Services grew revenue 14% to $87.1 billion, while YouTube added another billion to get to $10.26 billion. Search remains a key driver with $56.6 billion in revenue, boosted by the rapid rollout of AI features in Google Search.
The biggest jumper was Google Cloud, which grew revenue 34% to $15.16 billion. Cloud benefited from a surge in demand for AI infrastructure, generative tools and core cloud services. The Cloud backlog reached $155 billion and provides exceptionally strong visibility into future revenue.
Operating profit rose to $31.23 billion, up 9%. The published numbers include a $3.5 billion fine from the European Commission; on an adjusted basis, operating profit would have risen 22% and margin reached 33.9%. Net income jumped 33% year-over-year to $34.98 billion and EPS jumped 35% to $2.87. The result included $12.8 billion of unrealized gains on investments.
Capex for 2025 was raised to $91-93 billion, reflecting rapidly growing investments in data centers, servers, AI models, and infrastructure necessary to train and operate generative systems.
CEO Commentary
Sundar Pichai described the quarter as "fantastic" and highlighted that the company saw double-digit growth in every major part of its business. He highlighted the importance of AI to the entire platform, particularly the rapid adoption of Gemini - which processes over 7 billion tokens per minute - and the 650 million active users of the Gemini App.
According to the CEO, search is undergoing a fundamental transformation thanks to AI Overviews and AI Mode, which are significantly changing the way people get information. On Google Cloud, Pichai then highlighted the huge demand for AI infrastructure and generative solutions, which has significantly boosted backlog growth.
Pichai also said that Alphabet will continue to invest massively in its own data centers, chip projects, optimization models and product integrations across the platform.
Outlook
Alphabet enters the year-end with an exceptionally strong position, supported not only by robust segment growth but also by accelerated AI adoption across its entire product ecosystem. The company expects double-digit revenue growth in key divisions, particularly search, YouTube and cloud, to continue in the coming quarters.
With backlog growth to $155 billion, Google Cloud is becoming the most visible driver of future revenue as many customers shift their AI workloads to Google's infrastructure. At the same time, Alphabet is accelerating its pace of investment, with capital expenditures for 2025 estimated to be in the range of $91 billion to $93 billion. This amount reflects data center expansion, in-house chip development, as well as AI infrastructure upgrades that are expected to be key to maintaining a competitive advantage.
Management clearly communicates that maximizing growth in segments that are directly connected to the new AI cycle remains a priority. Alphabet is therefore further expanding the integration of generative models into search, advertising, work tools and subscriber services.
Long-term results
Alphabet's long-term evolution shows deep-rooted stability and the ability to grow even in a more complex macro environment. Revenues for 2024 increased to $350 billion, the third consecutive year of double-digit growth. The largest portion of revenue still comes from the search and advertising business, which continues to maintain extraordinary momentum after twenty years.
Gross profit increased to $203.7 billion, up 17% year-on-year. This reflects a combination of a better price mix, subscription growth and a gradual optimisation of the cost base. Google was able to increase operating profit by more than a third to $112 billion, a clear indication that the reorganisation of the last two years has delivered the expected results.
Net profit rose to USD 100 billion, an increase of more than 35%, confirming Alphabet as one of the most profitable companies in the world. EPS increased by almost 40%, which, in addition to the profit growth, was also supported by massive share buybacks that permanently reduce the number of shares outstanding.
Alphabet's long-term results thus paint a picture of a company that is not only growing, but also significantly strengthening its margin structure and improving capital efficiency. In an environment of increasing demands on AI infrastructure, this is an extremely important differentiator that gives Alphabet the ability to invest more heavily than most competitors.
News
Alphabet announced several key developments during the past quarter that will shape its strategy for the years ahead. The company faced a $3.5 billion fine from the European Commission, which was reflected in the third-quarter accounts, but with no impact on the long-term investment plan. Alphabet is also further expanding its implementation of AI in search, where AI Overviews and AI Mode are changing the way users interact with information. Google Cloud continues to grow at a high rate and is building a strong base of future revenue with a backlog of $155 billion. The company also announced tax changes to bolster cash flow and declared a dividend of $0.21 per share.
Shareholder Structure
Alphabet has a stable and extremely strong institutional base. Institutions hold 60.8% of the stock, underscoring long-term investor confidence in the company's growth story. The largest shareholders are Vanguard Group with 7.64%, BlackRock with 6.63%, State Street with 3.44% and FMR with just over 2%. Management and insiders hold 6.72%, which represents a healthy level of ownership interest in the long-term performance of the company as well as ample liquidity for market investors.
Analyst expectations
Analysts expect Alphabet to continue to be one of the fastest growing mega-cap companies in the world. The consensus expects continued double-digit growth, driven by a combination of AI search, expanding YouTube advertising, accelerating cloud adoption and growing subscriptions. Particular focus is on the integration of generative models into search, which can further increase advertising effectiveness and extend the growth cycle of this segment. At the same time, analysts expect operating margin expansion, further EPS growth, and a gradual increase in capital expenditures, which are necessary for the development of AI infrastructure.