Alphabet Q1 Earnings Strong, Led by Google, YouTube & Cloud

Alphabet, the parent company of Google and YouTube, has kicked off 2025 on a high note, reporting stronger-than-expected Q1 earnings and reaffirming its dominance across search, cloud, and advertising—even as artificial intelligence reshapes the tech landscape.

Following the announcement, Alphabet shares jumped over 5% in after-hours trading, signalling investor confidence in the company’s long-term strategy.

Q1 2025 Key Financial Highlights

Here’s how Alphabet performed compared to Wall Street expectations, according to estimates from LSEG:

• Revenue: $90.23 billion vs. $89.12 billion expected

• Earnings per share (EPS): $2.81 vs. $2.01 expected

• Net Income: $34.54 billion, up 46% YoY from $23.66 billion

• YouTube Ads: $8.93 billion vs. $8.97 billion expected

  Despite the slight miss, YouTube’s ad business continues to be a core revenue stream.

• Google Cloud: $12.26 billion vs. $12.27 billion expected

  Cloud revenue increased 28% YoY, with margins up to 17.8% from 9.4% last year.

• Search & Other Ads: $50.7 billion, up from $46.16 billion last year

  Google’s dominance in search advertising remains unshaken, even in an AI-first world.

Advertising overall brought in $66.89 billion, a solid 8.5% increase from a year ago.

Alphabet highlighted the success of its AI Overviews feature — the generative AI snapshot tool integrated at the top of Google’s search results — which now reaches 1.5 billion users monthly, up from 1 billion in October 2024.

“Search remains at the heart of our business, and we’re enhancing it through responsible AI,” said Google CEO Sundar Pichai.

Despite strong results, Google acknowledged headwinds related to President Trump’s plan to end the de minimis trade loophole starting May 2. The loophole currently allows shipments under $800 to enter the U.S. duty-free—a policy heavily leveraged by Chinese e-commerce platforms like Temu and Shein, both major digital ad buyers.

Philipp Schindler, Google’s Chief Business Officer, said the change could create a “slight headwind” for Google Ads in APAC.

In March, Alphabet announced its largest acquisition to date — a $32 billion deal to acquire cybersecurity startup Wiz, significantly higher than its original $23 billion offer in 2024.

The deal is expected to boost Google Cloud’s security offerings and support growing enterprise demand for multicloud infrastructure.

Alphabet’s Other Bets segment — which includes Waymo and Verily — brought in $450 million, down from $495 million YoY. However, Waymo showed solid momentum, now delivering over 250,000 autonomous rides per week across Phoenix, Los Angeles, San Francisco, and Austin.

That’s up from 200,000 in February 2025, showcasing strong expansion in the robotaxi space.

Still, the segment posted a loss of $1.23 billion, up from $1.02 billion last year.

Alphabet plans to invest $75 billion in capital expenditures this year, primarily in AI infrastructure, data centres, and custom silicon development. The company also announced a $70 billion stock repurchase authorisation, mirroring last year’s move.

Alphabet’s Q1 performance reveals a company that’s navigating the AI transition with confidence, while making strategic bets in cloud security, autonomous mobility, and global infrastructure. Despite regulatory scrutiny and macroeconomic pressures, Alphabet’s strong balance sheet and diversified portfolio continue to set it apart in big tech.