Alphabet's Q3'25: The $100 Billion Quarter
Cloud Profitability Soars, Gemini Surges, and AI Drives Search Growth
Alphabet reported Q3 2025, and it was a blockbuster quarter. The company delivered its first-ever $100 billion quarter and beat expectations on revenue and earnings.
Revenue: $102.3B (up 16% YoY), Vs estimates of $100.1B.
EPS: $2.87 (up 35% YoY), Vs estimates $2.26.
This quarter provided undeniable proof that Alphabet’s massive AI investments are paying off, strengthening its core businesses and driving new, accelerating growth.
Let’s dive into the details.
Revenue
At a high level, Alphabet’s 16% revenue growth was an acceleration from last quarter, driven by double-digit growth in every key segment.
Google Search & other: $56.6B (up 14.5% YoY)
YouTube ads: $10.3B (up 15% YoY)
Google subscriptions, platforms, and devices: $12.9B (up 20.8% YoY)
Google Cloud: $15.2B (up 33.5% YoY)
Source: Fiscal.ai (affiliate link with a 15% discount for StockOpine readers), StockOpine Analysis
Profitability
Operating income was $31.2 billion, up 9.5%. However, the operating margin of 30.5% (lower than the 32.3% of Q3’24) was impacted by a one-time $3.5 billion charge for a European Commission (EC) fine, which was accrued in G&A expenses.
If we adjust for that, non-GAAP operating income was $34.7 billion, up 22%, and the non-GAAP operating margin was 33.9% (similar to Q2’25 adjusted margin). The underlying profitability remains strong, despite the ongoing investments.
Source: Fiscal.ai (affiliate link with a 15% discount for StockOpine readers), StockOpine Analysis
Google Search
The idea that AI chatbots would divert queries from Google Search appears to have fallen apart.
Search revenue growth was a robust 14.5% (up from 11.7% in Q2’25), driven by strength in the retail and financial services verticals. So, what’s going on?