Google parent Alphabet tops earnings expectations in Q1 2025 as Ads and AI fuel growth
Alphabet crushed WallStreet's Q1 forecasts and bets big on the future.
Alphabet opened big tech earnings season on a high note, posting better-than-expected first-quarter results that show its core businesses are still delivering—and its AI investments may be starting to pay off.
The Google and YouTube parent reported $90.2 billion in revenue for the first quarter, a 12% jump from the same period last year, topping Wall Street forecasts. Profits soared even faster, with net income up 46% to $34.5 billion, or $2.81 per share, crushing the $2.01 that analysts expected. It’s a textbook Q1 for Alphabet: slightly cooler than the holiday-packed Q4, but strong where it counts—year-over-year growth.
At the heart of it, Google’s core ad business is still a powerhouse. Ad revenue climbed to $66.9 billion, up 8.5%, with Google Search contributing $50.7 billion, just edging out projections. YouTube ad revenue was steady at $8.93 billion, and Google Cloud matched forecasts at $12.3 billion, showing that enterprise demand for AI-driven solutions remains strong.
But what really stood out this quarter was Alphabet’s growing AI footprint. CEO Sundar Pichai called it a "super exciting" quarter, highlighting the rollout of Gemini 2.5—Alphabet’s most advanced AI model to date—and rapid adoption of AI Overviews in Search, now reaching more than 1.5 billion users monthly. Across platforms, Alphabet surpassed 270 million paid subscriptions, driven by YouTube Premium and Google One.
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Investors were clearly impressed. The company announced a massive $70 billion stock buyback and raised its quarterly dividend by 5% to $0.21. That double-shot of shareholder confidence helped push Alphabet shares up nearly 5% in after-hours trading, putting the stock at a four-week high.
Of course, not everything is smooth sailing. Alphabet is still in the thick of an antitrust battle with the U.S. Justice Department, stemming from allegations that it paid billions to secure its dominance as the default search engine across devices. A remedies trial is underway, with the potential for serious structural changes—possibly even forced divestitures.
But for now, the numbers are doing the talking. Alphabet is accelerating its growth, with AI at the centre of it all.
