Alphabet’s fiscal third-quarter 2025 results highlight how artificial intelligence (AI) has become central to the company’s growth strategy and financial performance. The Google parent reported revenue of $102.3 billion, up 16 percent year over year, marking its first-ever $100 billion quarter.
AI-driven innovation powered gains across every major business segment. Google Cloud saw the most dramatic benefit, with revenue surging 34 percent to $15.2 billion, fueled by demand for AI infrastructure, generative AI solutions, and Vertex AI services. The segment’s backlog rose to $155 billion, reflecting strong enterprise adoption of AI workloads on Google Cloud Platform.
In its core advertising business, Alphabet maintained momentum despite heightened competition. Search and YouTube ads revenue rose 12.6 percent to $74.2 billion, supported by new AI-powered features such as AI Overviews and AI Mode, which improve user engagement and ad relevance. Analysts noted that these features are helping stabilize Google’s dominance in search amid the rise of AI-native competitors like OpenAI’s Atlas browser.
Google Search revenue has increased 15 percent to $56.567 billion in Q3-2025. Google’s revenue from YouTube Ads has increased 15 percent to $10.261 billion in Q3-2025. Google Network revenue rose 3 percent to $7.354 billion in Q3-2025. Google said its revenue from Subscriptions, Platforms & Devices grew 21 percent to $12.87 billion in Q3-2025.
Gemini, Alphabet’s family of large language models, continues to anchor its AI ecosystem. CEO Sundar Pichai said Gemini now processes 7 billion tokens per minute via direct API usage and powers products across Search, YouTube, Cloud, and Android. The Gemini App has surpassed 650 million monthly active users, underscoring growing consumer adoption of Google’s AI tools.
AI is also expanding Alphabet’s subscription business, which grew to over 300 million paid users, led by Google One and YouTube Premium. Across the company, Sundar Pichai emphasized a “full-stack AI approach” — spanning custom Tensor Processing Units (TPUs), cloud infrastructure, and consumer products — that is driving both revenue acceleration and operational efficiency.
Operating income rose 9 percent (or 22 percent excluding a $3.5 billion EC fine), with margins benefiting from automation and cost control initiatives tied to AI efficiencies. Net income climbed 33 percent, and earnings per share rose 35 percent to $2.87.
Alphabet plans to ramp up investment to meet AI-related demand, raising its 2025 capital expenditure forecast to $91–93 billion, up from earlier projections. Much of this spending is directed toward data center expansion and AI compute capacity.
Capital expenditure of Alphabet has shown a steady increase to $23.953 billion in Q3 2025 as compared with $22.446 billion in Q2-2025, $17.197 billion in Q1-2025, $14.276 billion in Q4-2024 and $13.061 billion in Q3-2024.
Sundar Pichai summarized: “Our full-stack approach to AI is delivering strong momentum and we’re shipping at speed.” The quarter underscores that AI is no longer a future bet for Alphabet — it is the core engine powering growth across cloud, advertising, and consumer ecosystems.
Rajani Baburajan
