Google Delivers First $100 Billion Quarter on AI and Cloud Growth

Google's parent company, Alphabet, reported third-quarter revenue of $102.3 billion, up 16% year-over-year, marking its first-ever $100 billion quarter. Google Search, YouTube, subscriptions, devices, and Google Cloud led growth.

Google Services revenue rose 14% to $87.1 billion, while Google Cloud revenue jumped 34% to $15.2 billion, driven by demand for AI infrastructure and generative AI products. Operating income increased 9% with a 30.5% margin. Excluding a $3.5 billion European Commission fine, operating income rose 22%, and margin reached 33.9%. Net income increased 33% to $2.87 per share.

“Alphabet had a terrific quarter, with double-digit growth across every major part of our business,” said Sundar Pichai, CEO of Alphabet and Google. “We delivered our first-ever $100 billion quarter.”

Pichai said Alphabet’s “full-stack approach to AI” is driving strong business results. “Our first-party models, like Gemini, now process 7 billion tokens per minute via direct API use by customers,” he said. The Gemini app reached 650 million monthly active users, and Google’s paid subscriptions crossed 300 million, led by Google One and YouTube Premium.

Google Cloud ended the quarter with $155 billion in backlog, up 46% from the previous quarter. “We’re investing to meet customer demand and capitalise on growing opportunities across the company,” Pichai said.

Alphabet’s AI infrastructure continues to expand, powered by both NVIDIA GPUs and Google’s in-house TPUs. The company announced new A4X Max instances using NVIDIA GB300 chips and upcoming availability of its seventh-generation TPU, Ironwood.

Alphabet expects full-year 2025 capital expenditures between $91 billion and $93 billion, reflecting continued investment in data centres and AI infrastructure

In research, Alphabet highlighted progress in AI and quantum computing. Pichai noted that the company’s Willow quantum chip achieved a 13,000x speed improvement over leading supercomputers. He also congratulated Michel Devoret, Google’s chief scientist for quantum hardware, on receiving a Nobel Prize in Physics.

Google reported rapid growth in AI-driven products. AI Overviews and AI Mode in Search are now available in 40 languages, with AI Mode reaching 75 million daily active users. “AI Mode is already driving incremental total query growth for Search,” Pichai said.

In Cloud, Alphabet said it is adding customers and signing larger deals. “Over 70% of existing Google Cloud customers use our AI products,” Pichai said, citing clients like Banco BV, Best Buy, and LG AI Research. The company said revenue from products built on its generative AI models grew over 200% year-over-year.

YouTube continued to expand its footprint, maintaining the top position in US streaming watch time. The platform also broadcast its first live NFL game globally from Brazil, drawing more than 19 million viewers. YouTube Shorts now generates more revenue per watch hour in the U.S. than traditional in-stream videos.

Waymo announced plans to expand to London, Tokyo, and several US cities, including Dallas and Seattle. The autonomous driving unit also secured approval to operate at San Jose and San Francisco airports.

“Overall, this was a milestone quarter,” Pichai said. “Our leadership in AI positions us well for the opportunities ahead.”