Cloud business maintained high growth, driving tech giant Google's quarterly revenue to surpass $100 billion for the first time.
After the US stock market closed on October 29th local time, Alphabet, Google's parent company, released its financial report for the third quarter of 2025, ending September 30th. The report showed that Alphabet achieved revenue of $102.346 billion in the third quarter, a year-on-year increase of 16%, exceeding market expectations of $99.9 billion; non-GAAP net income was $34.979 billion, a year-on-year increase of 33%; diluted earnings per share were $2.87, higher than market expectations of $2.33.
In September of this year, Google was fined $3.45 billion by EU regulators for monopolistic practices in its advertising technology business, impacting its net profit in the third quarter.
Google CEO Sundar Pichai stated, "Alphabet had an outstanding quarter, with double-digit growth in every one of our major businesses. This is the first time in our history that quarterly revenue has surpassed $100 billion." It was reported that as of the end of the third quarter, Google AI ( Artificial Intelligence) ... The Gemini app has over 650 million monthly active users, Google Cloud has a backlog of $155 billion, and subscription plans such as Google One and YouTube Premium have over 300 million subscribers in total.
Google's third-quarter earnings summary. Source: Google
On the 29th, Google (Nasdaq: GOOGL) shares rose 2.51% to close at $275.17 per share, with a total market capitalization of $3.33 trillion. Following the earnings release, the company's after-hours stock price rose nearly 7%.
Regarding capital expenditures, Google has raised its forecast for the second time this year, projecting that capital expenditures in 2025 will be between $91 billion and $93 billion. Last quarter, Google had just raised its 2025 capital expenditure forecast from $75 billion to $85 billion.
Alphabet CFO Anat Ashkenazi stated on the earnings call that capital expenditures are expected to "increase significantly" in 2026, and the company will provide more details on the fourth-quarter call. The majority of the company's capital expenditures are allocated to building data centers to support Google Cloud and AI. The demand for infrastructure and these services has been growing.
Looking at the business segments, Google's two core businesses are advertising and cloud services. In the third quarter, Google's advertising revenue grew to $74.182 billion from $65.854 billion last year, a year-on-year increase of 13%. Including advertising revenue from Google's subscriptions, platforms, and devices segment, Google's services revenue reached $87.052 billion in the third quarter, compared to $76.51 billion in the same period last year, a year-on-year increase of 14%.
Google Search revenue increased by 15% year-over-year, from $49.385 billion in the same period last year to $56.567 billion, alleviating market concerns about AI companies like OpenAI seizing the search market. YouTube's advertising revenue also increased by 15% year-over-year, from $8.921 billion in the same period last year to $10.261 billion.
Google emphasized that advancements in AI have helped improve the company's search business. According to reports, as of the end of the third quarter, AI Mode, an AI product embedded in the Google search engine, had 75 million daily active users in the United States, and search queries under this mode doubled in the third quarter. Simultaneously, the company began testing advertising features within AI Mode.
In its cloud business, Google Cloud saw accelerated growth in the third quarter, with revenue increasing by 34% year-over-year to $15.157 billion from $11.353 billion in the same period last year. Microsoft, which released its financial results on the same day... The financial report shows that its Azure cloud business revenue grew by 40%.
Ashkenazi stated that Google Cloud's backlog of orders reached $155 billion at the end of the third quarter, primarily driven by demand for enterprise AI infrastructure and Google's Gemini 2.5 AI model.
During the conference call, Pichai noted, "In the first three quarters of this year, we signed more than $1 billion in (cloud services) contracts, exceeding the total number signed in the previous two years." He also stated that more than 70% of Google Cloud's existing customers are using its AI products.
Thomas Monteiro, senior analyst at financial website Investing.com, pointed out that Google Cloud's third-quarter revenue exceeded the market's highest expectations: "In today's competitive environment, it is impressive that Alphabet has achieved such results without hurting profit margins. What is even more interesting is that the company's capital expenditures have not put pressure on profit margins as many had expected, which makes the company's future prospects still optimistic."
In addition, non-core business units, including Verily (life sciences) and Waymo (autonomous driving), generated $344 million in revenue in the third quarter, down from $388 million in the same period last year. Google also noted that it lost $1.42 billion on other investments in the third quarter, compared with a loss of $1.12 billion in the same period last year.
Just a week ago, Google and AI startup Anthropic announced a partnership under which the latter will deploy up to one million Google TPU chips to train its large AI model, Claude. This expansion plan, worth tens of billions of dollars, strengthens the partnership between the two companies and helps Google demonstrate the versatility of its self-developed TPU chips.
(Source: The Paper)
