Alphabet Inc., Google's parent company, has announced a landmark achievement, reporting its first-ever quarter exceeding $100 billion in revenue. The company's Q3 2025 financial results reveal consolidated revenues of $102.3 billion, a 16% increase year-over-year (or 15% in constant currency). This milestone highlights the continued success and diversification of Google's various business segments, particularly in AI, Cloud, and YouTube.
CEO Sundar Pichai acknowledged the landmark quarter, stating that Alphabet is "firmly in the generative AI era". He noted that the company's revenue number has doubled in the last five years. Alphabet's success is attributed to its "full-stack approach to AI," which spans infrastructure, models, tooling, products, and platforms.
Google Services, which includes Search, YouTube ads, subscriptions, platforms, and devices, saw revenues increase by 14% to $87.1 billion. Google Search & other advertising revenues increased by 15% to $56.6 billion, driven by growth across major verticals like retail and financial services. YouTube advertising revenues also increased by 15% to $10.3 billion, fueled by direct response and brand advertising. YouTube has also been using AI to identify products to make videos more shoppable. Google subscriptions, platforms, and devices revenues increased 21% to $12.9 billion, supported by growth in YouTube and Google One subscriptions.
Google Cloud continues to be a major growth driver, with revenues increasing by 34% to $15.2 billion. This growth is attributed to the Google Cloud Platform (GCP), AI infrastructure, and generative AI solutions. Over 70% of Google Cloud customers are actively utilizing Google AI tools. The Cloud division's operating income increased by 85% to $3.6 billion, with the operating margin increasing from 17.1% to 23.7%. Google Cloud backlog grew 46% quarter over quarter to $155 billion.
Alphabet's financial success isn't limited to revenue growth. The company's operating income increased by 9% to $31.2 billion, with an operating margin of 30.5%. Excluding a $3.5 billion fine related to a European Commission (EC) charge, operating income increased by 22%, and the operating margin was 33.9%. Net income increased by 33% to $35 billion, and earnings per share (EPS) increased by 35% to $2.87. Free cash flow for the quarter was $24.5 billion, and the company ended the quarter with $98.5 billion in cash and marketable securities.
Alphabet is scaling its AI ecosystem across ads, infrastructure, and products. AI Max, launched globally in September, has become the company's fastest-growing AI-powered search ads product. Google is now processing more than 1.3 quadrillion tokens per month across its AI stack, a 20x increase from last year. The Gemini model family has over 650 million monthly active users, with queries tripling since Q2.
Looking ahead, Alphabet anticipates capital expenditures for 2025 to range between $91 billion and $93 billion, up from the prior forecast of $85 billion. This increased investment reflects the company's commitment to meeting customer demand and capitalizing on growth opportunities. The company expects capital expenditures to trend significantly higher in 2026. Each of Alphabet's thirteen product lines now generates more than US$1 billion in annual run rate.
