Alphabet exceeds expectations, raises spending for the year, sees huge growth in cloud revenue in Q2 2025 earnings

shruti.shekar@futurenet.com (Shruti Shekar)
2025-07-23 16:39:00
www.androidcentral.com

What you need to know

In Q2 2025, Alphabet reported revenue growth YoY, hitting $96.4 billion.
The company is increasing capital expenditure to $85 billion in 2025.
CEO Sundar Pichai says the company is “leading at the frontier of AI and shipping at an incredible pace.”

Alphabet, Google’s parent company, reported its Q2 earnings for 2025. The company reported a 14% revenue growth year-over-year to $96.4 billion, the earnings report indicated.

The report showed that the company’s operating income increased 14% to $31.27 billion and that Alphabet’s net income increased 19%, totalling $28.19 billion. The company has also indicated in the report that it’s increasing its capital expenditures in 2025 to about $85 billion.

CEO Sundar Pichai said the company had a “standout quarter, with robust growth across the company.”

“We are leading at the frontier of AI and shipping at an incredible pace. AI is positively impacting every part of the business, driving strong momentum. Search delivered double-digit revenue growth, and our new features, like AI Overviews and AI Mode, are performing well. We continue to see strong performance in YouTube as well as subscription offerings,” he noted.

A photo of the Google Logo surrounded by plants at the company's NYC headquarters building

(Image credit: Nicholas Sutrich / Android Central)

Google Search, Google subscriptions, platforms and devices, and YouTube ads saw a 12% increase in revenue growth, totalling $82.5 billion.

The company’s cloud revenue saw a massive 32% growth, adding up to $13.6 billion.

The reported numbers beat economic analyst expectations. The company’s stock fell 2% following the release of its earnings report.

Analysts at LSEG expected the company to report total revenue of $94 billion, with $2.18 earnings per share. StreetAccount’s predictions for YouTube advertising ($9.56 billion) and Google Cloud revenue ($13.11 billion) fell short of Alphabet’s results: $9.8 and $13.6 billion, respectively.

In June, OpenAI decided to partner with Google Cloud services to help run the backend for ChatGPT and its other AI tools. OpenAI jumping on board with Google Cloud is a solid win for Alphabet. Even though it trails behind AWS and Azure, Google’s cloud setup will now help power OpenAI’s operations in the U.S., UK, Japan, the Netherlands, and Norway.

Bank of America Global Research analyst Justin Post said in an investor note that Alphabet has many positives this quarter, including “increasing advertising spending, AI helping to power revenue, and strong cloud performance,” Yahoo Finance wrote.

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