For the first time in the company’s history, Alphabet surpassed $400 billion in annual revenue. The company announced the milestone as part of its fourth quarter earnings report for 2025 on Wednesday after the stock market closed.
Growth in Alphabet’s AI division, particularly the launch of Gemini 3, as well as increased search led to the notable year. The Gemini App has over 750 million monthly active users, the company revealed in its earnings report.
Alphabet saw growth across every major category. During the fourth quarter of 2025, Google Cloud saw a 48% to $17.7 billion, which was led by an increase in the Google Cloud Platform (GCP) across enterprise AI infrastructure and solutions. Google Cloud ended 2025 with an annual run rate of over $70
billion, which was driven by demand for AI products. In the past several months, Alphabet has made several AI deals with major competitors like Meta, Anthropic, OpenAI and Apple. This huge Google Cloud jump shows that these deals have started to pay off.
Revenue from the Google services division increased 14%. That boost was led by 17% growth in Google Search and other; 17% in Google subscriptions, platforms and devices; and 9% in YouTube ads. Speaking of YouTube ads, revenue across YouTube’s ads and subscriptions exceeded $60 billion for 2025. The company reported over 325 million paid subscriptions across consumer services led by Google One and YouTube Premium.
Heading into Alphabet’s earnings call, shares were down 0.6% to $331.43.
Looking ahead, the company expects its capital expenditure to double. Alphabet plans to spend between $175 to 185 billion, an increase from its $91.4 billion capex spend in 2025.
Here are the results for both the quarter and 2025 as a whole:
Net income: $34.5 billion for the quarter, a 30% increase compared to $26.5 billion a year ago. For fiscal year 2025, net income increased by 32% compared to the previous year, hitting $132.2 billion.
Earnings per share: $2.82 per share for the quarter, compared to $2.65 per share expected from analysts estimates compiled by Yahoo Finance. For the year, earnings per share came in at $10.81, a 34% increase compared to the $8.04 reported in 2024.
Revenue: $113.8 billion for the quarter, up 18% year over year and above the $111.4 billion expected from analysts estimates compiled by Yahoo Finance. For the year, revenue increased 15% compared to last year, hitting $402.8 billion.
YouTube Ad Revenue: $11.4 billion for the quarter, a 9% increase from the $10.5 billion reported a year ago.
Google Subscriptions, Platforms and Devices: $13.6 billion for the quarter, a 17% increase from the $11.6 billion reported a year ago.
Earlier this year, Google announced it was moving forward with Genie, an AI model that generates worlds. When asked how the offering may be used by YouTube creators, Google CEO Sundar Pichai noted that all of Google’s tools including Genie, its music generation model Lyria and its video generator Veo are designed for the company’s users.
“We are going to keep incorporating these tools. Already, creators are responding by adopting these, but we do want to put creators at the center of the experience. That’s very, very important to us, so, for us, it’s making sure YouTube is a voice for creator expression. That’s the foundation by which we will approach this.”
Philipp Schindler, Google’s senior vice president and chief business officer, also explained the intricacies of YouTube’s annual revenue. The more than $60 billion in revenue the segment saw during the year was driven by strong growth and response on the brand side. The growth rate lapped the strong spend the segment saw on U.S. elections.
“It’s important to think about YouTube ads and subs holistically, because, when a user shifts from being an ad-supported user to YouTube Music and Premium customer, it has a slightly negative impact on YouTube ads or revenues but a positive impact on our business,” Schindler explained. “We had strong revenue growth in YouTube subscriptions this quarter, particularly in the YouTube Music and Premium category.”
Prior to Alphabet reporting its fourth quarter earnings, analysts expected that the company would see a jump in revenue driven by increases related to Google Cloud and Google Services — the segment that includes ad revenue from search and YouTube. Google Services accounts for a majority of Alphabet’s revenue.
Following Alphabet’s third quarter earnings report in October, the company’s stock has soared 25%. Yahoo predicts this jump is because several AI deal with Meta, Anthropic and OpenAI that involved Alphabet’s cloud segment have started to pay off. The release of Google’s Gemini 3 AI model as well as the Gemini deal with Apple to incorporate it into Siri also likely pushed the stock higher.
Though Alphabet was expected to perform well, the broader “Magnificent Seven” — the nickname given for the group of tech stocks that include Alphabet, Amazon, Apple, Tesla, Meta, Microsoft and Nvidia — is collectively down roughly 3%. Microsoft has seen the biggest fall due to its 24% drop in shares.
More to come …