Alphabet Q3 2025 Earnings: Revenue Tops $100 Billion for the First Time as Cloud and AI Spending Accelerate
Alphabet posted its first-ever $100 billion quarter, with profit up sharply and Cloud growth accelerating, while raising 2025 AI spending plans.
| Q3 2025 | Reported |
|---|---|
| EPS | $2.87 |
| Revenue | $102.35B |
Figures as reported by the company to the SEC for the quarter ended September 30, 2025. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Total revenue rose 16% year-over-year to $102.3 billion, Alphabet’s first quarter ever above $100 billion, with double-digit growth across Search, YouTube ads, subscriptions and Cloud.
- Net income climbed 33% and earnings per share rose 35% from a year earlier, as CEO Sundar Pichai pointed to broad-based growth across every part of the business.
- Google Cloud revenue jumped 34% to $15.2 billion, with management citing rising demand for AI infrastructure and cloud services; the unit’s backlog of committed future business grew to $155 billion.
- The very high margins shown in the fundamentals (roughly 61% gross, 33% operating) reflect that Google’s advertising and cloud businesses convert a large share of each new revenue dollar into profit, even as spending on AI infrastructure ramps up.
- Return on equity near 51% and profit margin near 55% show the company is generating substantial profit relative to shareholder capital, giving it capacity to fund heavy AI-related investment from its own cash flow.
- Alphabet raised its full-year 2025 capital spending outlook to $91-$93 billion, up from about $85 billion previously, mainly to buy servers, build data centers and expand networking capacity for AI workloads.
- Executives said on the earnings call that they expect a ‘significant increase’ in capital expenditures in 2026 to keep up with AI and cloud customer demand.
- Coverage noted the results showed strength across search advertising, YouTube, and cloud simultaneously, easing earlier investor concern that AI spending was outpacing revenue growth.
Q3 2025 in context
| Metric | Sep 2025 | Sep 2024 | Change |
|---|---|---|---|
| Revenue | $102.3B | $88.3B | +15.9% |
| Net income | $35.0B | $26.3B | +33.0% |
| Free cash flow | $24.5B | $17.6B | +38.7% |
| Diluted EPS | $2.87 | $2.12 | +35.4% |
| Gross margin | 59.6% | 58.7% | +0.9 pts |
| Operating margin | 30.5% | 32.3% | -1.8 pts |
| Net margin | 34.2% | 29.8% | +4.4 pts |
Figures for the quarter ended Sep 2025 and the quarter ended Sep 2024, as reported to the SEC.
Each company's quarter ending in calendar Q3 '25, as reported to the SEC. A peer that reported no revenue figure for that quarter is left out.
How the stock took it
Alphabet Inc. closed at $274.57 on Oct 29, 2025, the last session before the report, and at $281.19 on Oct 31, 2025, the first session after it — +2.4% across the report.
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · earnings call / company report · earnings call · CNBC