Alphabet has shattered records by surpassing $100 billion in quarterly revenue for the first time, delivering earnings that exceeded all expectations.
Google’s parent company reported third-quarter revenue of $102.3 billion, a 16% year-over-year increase that significantly outpaced analysts’ forecast of $99.89 billion—signaling that the AI revolution is now translating into tangible financial gains.
According to its latest earnings release, Alphabet’s net income surged 33% to nearly $35 billion, while earnings per share jumped 35% to $2.87, beating estimates by more than 25%. This performance reflects a fundamental shift in enterprise operations, driven by surging demand for AI infrastructure.
AI-Powered Surge
Google Cloud emerged as the standout performer, with revenue climbing 34% to $15.2 billion—well above the anticipated $14.72 billion. This growth stems from unprecedented enterprise demand for AI infrastructure as businesses race to integrate AI into their workflows. The cloud division now boasts a $155 billion backlog, a 46% increase quarter-over-quarter, locking in future revenue streams.
Revenue from generative AI products alone more than tripled year-over-year in Q3 2025. Google’s Gemini app now serves over 650 million monthly active users, up from 450 million last quarter, and AI-infrastructure-supported token usage surpassed 1.3 quadrillion per month by October—more than 20 times the volume from a year earlier. Google is no longer merely experimenting with AI; it’s betting its future on it—and Google Cloud is reaping the rewards.
The evidence is in the contracts: in the first three quarters of 2025, Google Cloud signed more deals valued over $1 billion than in the previous two years combined.
Core Advertising Defies Doubters
While cloud growth dominates headlines, Google’s core Search business has proven remarkably resilient in the AI era. Search and other revenue rose 15% to $56.6 billion, countering claims that AI would erode traditional search. YouTube ad revenue also grew 15%, reaching $10.3 billion.
AI Overviews now serve over 2 billion monthly active users across 40 languages, and the new AI Mode feature hit 75 million daily active users by quarter-end. Subscription and services revenue reached $12.9 billion, up 21% year-over-year, with total paid subscriptions exceeding 300 million.
Overall ad revenue climbed to $74.18 billion, up from $65.85 billion a year earlier.
Building for Dominance
Alphabet’s boldest signal of its AI ambitions lies not in words—but in numbers. The company raised its 2025 capital expenditure forecast to between $91 billion and $93 billion, up from the prior estimate of around $85 billion. The message is clear: Google isn’t just riding the AI wave—it’s constructing the infrastructure to lead it for years to come.
Despite a €3.5 billion fine from the European Commission in September, Alphabet maintained a healthy operating margin of 31% (nearly 34% excluding the penalty). The company ended the quarter with $98.5 billion in cash and marketable securities and repurchased $11.5 billion in stock—demonstrating the financial strength to aggressively invest in AI.
These results represent more than just a strong quarter. They illustrate a company successfully navigating the most transformative technological shift in decades.
