Google parent Alphabet’s Q2 revenue rises 13.8% to $96.4 bn, driven by ads and AI expansion

New Delhi: Alphabet reported strong financial results for the April–June quarter of 2025, with total revenue reaching $96.43 billion, a 13.8% year-on-year increase, surpassing analyst estimates of $94 billion. 

Net profit for the quarter stood at $28.2 billion, or $2.31 per share, up 19% from the same period last year.

The company’s growth was largely fuelled by its Google Services division, which includes core businesses such as search and YouTube. 

This segment contributed $82.5 billion to overall revenue. Within that, advertising revenue climbed 10.4% to $71.3 billion, up from $64.6 billion a year ago.

Google’s search advertising remained a key revenue driver, generating $54 billion, an 11.7% year-over-year increase, outperforming expectations of 8% growth. 

YouTube’s ad revenue also delivered strong results, rising 13% to $9.79 billion, up from $8.66 billion in Q2 last year, and beating analyst projections of $9.5 billion. The company credited this growth to higher consumption of YouTube Shorts and improved ad visibility following enforcement actions against adblockers.

CEO Sundar Pichai highlighted that Shorts now generate revenue per watch hour comparable to traditional in-stream videos in the US, and in some markets, even outperform them. 

YouTube’s momentum also extended to its subscription offerings, including YouTube Premium and Music Premium, which helped boost Alphabet’s subscriptions, platforms, and devices segment revenue by 20% to $11.2 billion. The platform now has 125 million paying subscribers, up 25 million from last year.

Pichai also noted the growing reach of AI Overviews, which now serve over 2 billion monthly users across more than 200 countries and territories in 40 languages. These features, he said, are encouraging more frequent searches, especially among younger users.

Alphabet’s cloud business posted significant gains as well. Google Cloud revenue grew 32% year-over-year to $13.6 billion, supported by strong demand for generative AI products and infrastructure. According to Pichai, “Nearly all Gen AI unicorns use Google Cloud,” and the division’s annual revenue run rate has now crossed $50 billion, with new customers on the Google Cloud Platform increasing by 28% quarter-over-quarter.

To support its continued AI expansion, Alphabet plans to invest approximately $85 billion in capital expenditures this year. The company operates what Pichai described as the leading global network of AI-optimised data centres and cloud regions.

Google’s Gemini AI models, which Pichai said deliver industry-leading performance across major benchmarks, are now embedded across Google products, including Workspace and the Gemini app, which has surpassed 450 million monthly active users.

“Our strong Q2 results reflect the strength of our advertising business and our strategic investments in AI and video,” Pichai said during the earnings call.