Alphabet ended 2025 on a strong note, reporting an 18% year-on-year increase in fourth-quarter revenue to $113.8 billion, buoyed by accelerating growth across Google Services and Google Cloud. For the full year, the tech giant surpassed a major benchmark, posting annual revenue of $402.8 billion for the first time. Quarterly net income rose 30% to $34.5 billion, while diluted earnings per share advanced 31% to $2.82, reflecting solid operating leverage and broad-based expansion.
Google Services, Alphabet’s biggest business segment, recorded $95.9 billion in quarterly revenue, representing a 14% increase. The growth was driven by a 17% rise in Google Search & other, alongside a similar increase in subscriptions, platforms and devices. YouTube advertising revenue grew by 9%. Combined advertising and subscription revenue from YouTube exceeded $60 billion for the year, reinforcing its position as a major global media platform. Alphabet also disclosed that paid subscriptions across its consumer services have climbed beyond 325 million, supported by strong demand for Google One and YouTube Premium.
Google Cloud maintained its momentum, with quarterly revenue jumping 48% year over year to $17.7 billion. The surge was attributed to rising demand for enterprise AI infrastructure, AI-driven solutions and core Google Cloud Platform services. Operating income from Cloud more than doubled to $5.3 billion, signalling improved efficiency and scale. Alphabet said Cloud closed 2025 with an annual revenue run rate above $70 billion, reflecting increased enterprise adoption of AI.
Overall profitability remained healthy, as consolidated operating income grew 16% to $35.9 billion, with an operating margin of 31.6%. The results included a $2.1 billion employee compensation charge tied to Waymo. Chief executive officer Sundar Pichai described the quarter as “tremendous,” highlighting the rollout of Gemini 3 as a key achievement. He said Alphabet’s in-house AI models now process more than 10 billion tokens per minute through customer APIs, while the Gemini app has exceeded 750 million monthly active users. According to Pichai, AI continues to drive higher engagement in Search and growth across Alphabet’s product offerings.
To support rising AI demand, Alphabet plans to significantly increase spending, projecting capital expenditure of between $175 billion and $185 billion in 2026 to expand AI infrastructure and data centre capacity. During the quarter, the company also raised $24.8 billion through senior unsecured notes for general corporate purposes. In February 2026, Waymo announced a $16 billion funding round, largely backed by Alphabet.
Cash generation remained robust, with operating cash flow of $52.4 billion in the fourth quarter and trailing twelve-month free cash flow of $73.3 billion. Alphabet closed the year with $126.8 billion in cash, cash equivalents and marketable securities. The board approved a quarterly cash dividend of $0.21 per share, payable on March 16, 2026.
Regionally, revenue growth was widespread, rising 17% in the United States and EMEA, 22% in APAC, and 20% in Other Americas during the quarter. Alphabet’s workforce expanded to 190,820 employees by year-end, reflecting continued hiring in priority areas such as AI and cloud infrastructure.