Google’s parent company Alphabet reported a strong fourth quarter and full-year performance for the fiscal year 2025, driven by rising demand for AI across Search, Cloud, and YouTube.
The company said consolidated revenue rose 18% year-on-year to $113.8 billion in the quarter ended December 31, 2025, while net income increased 30%. Earnings per share came in at $2.82, up 31%. Operating income grew 16%, with an operating margin of 31.6%.
Annual revenue crossed $400 billion for the first time.
“It was a tremendous quarter for Alphabet,” said Sundar Pichai, chief executive of Alphabet and Google, in the post-earnings call. “The launch of Gemini 3 was a major milestone, and we have great momentum.”
Cloud, AI Lead Growth
Google Cloud posted the fastest growth across Alphabet’s businesses, with revenue up 48% to $17.7 billion in the quarter. The unit ended 2025 with an annual revenue run rate of more than $70 billion, while backlog grew 55% quarter-on-quarter to $240 billion.
Pichai said demand was being driven by enterprise AI infrastructure and AI solutions built on Google Cloud Platform. Alphabet said nearly 75% of Cloud customers now use its AI-optimised stack, spanning chips, models, and platforms.
“We’re seeing our AI investments and infrastructure drive revenue and growth across the board,” Pichai said.
To support growing AI demand, Alphabet said capital expenditure in 2026 is expected to be between $175–185 billion, reflecting continued investment in data centres, chips, and energy infrastructure.
Search, YouTube Remain Core Drivers
Google Services revenue rose 14% to $95.9 billion, led by a 17% YoY increase in Search and other advertising revenue. YouTube advertising grew 9% YoY in the quarter to $11.4 billion, while subscriptions also expanded.
YouTube’s combined advertising and subscription revenue exceeded $60 billion for the full year. Alphabet said it now has more than 325 million paid subscriptions across consumer services, including Google One and YouTube Premium.
Search usage reached a record high in the quarter, with AI-driven features such as AI Mode and AI Overviews contributing to longer and more complex queries, the company said.
Gemini Adoption Accelerates
Alphabet highlighted the rapid adoption of its Gemini models following the launch of Gemini 3 in November. First-party models now process more than 10 billion tokens per minute via direct API usage, up from 7 billion in the previous quarter.
The Gemini app has crossed 750 million monthly active users, while Gemini Enterprise has sold more than 8 million paid seats in four months. Alphabet said enterprise customers processed more than 5 billion interactions using Gemini Enterprise in the fourth quarter.
Alphabet’s expenses for the quarter included a $2.1-billion employee compensation charge related to Waymo. The autonomous driving unit crossed 20 million fully autonomous trips in December and now provides more than 400,000 rides per week, the company said.
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