Google Revenue Jumps 18% in Q4, Annual Sales Top $400 Billion for First Time

Alphabet  has reported a strong finish to 2025, with fourth-quarter revenue rising 18% year over year to $113.8 billion, driven by accelerating momentum in both Google Services and Google Cloud. For the full year, Alphabet crossed a major milestone, with annual revenue exceeding $400 billion for the first time, reaching $402.8 billion. Net income for the quarter jumped 30% to $34.5 billion, while diluted earnings per share climbed 31% to $2.82, reflecting broad-based growth and operating leverage across the business.

Google Services, the company’s largest segment, generated $95.9 billion in quarterly revenue, up 14%. Growth was led by Google Search & other, which rose 17%, and Google subscriptions, platforms and devices, also up 17%, while YouTube ads increased 9%. YouTube’s combined advertising and subscription revenue surpassed $60 billion for the full year, underscoring its expanding role as a global media and subscription platform. Alphabet also reported more than 325 million paid subscriptions across consumer services, including strong uptake of Google One and YouTube Premium.

Google Cloud continued to be a standout performer, with revenue surging 48% year over year to $17.7 billion in the quarter. Growth was fueled by demand for enterprise AI infrastructure, AI solutions, and core Google Cloud Platform products. Cloud operating income more than doubled to $5.3 billion, signaling improved scale and efficiency. Alphabet said Cloud exited 2025 at an annual revenue run rate of over $70 billion, highlighting the impact of enterprise AI adoption.

Profitability remained solid, with consolidated operating income rising 16% to $35.9 billion, and operating margin at 31.6%. Results included a $2.1 billion employee compensation charge related to Waymo. CEO Sundar Pichai described the quarter as “tremendous,” pointing to the launch of Gemini 3 as a major milestone. He noted that Alphabet’s first-party AI models now process more than 10 billion tokens per minute via customer APIs, while the Gemini app has grown to over 750 million monthly active users. Pichai said AI is driving expanded usage in Search and growth across the company’s product portfolio.

Alphabet is stepping up investment to meet rising AI demand. The company expects 2026 capital expenditures between $175 billion and $185 billion, aimed at expanding AI infrastructure and data center capacity. During the quarter, Alphabet also issued $24.8 billion in senior unsecured notes for general corporate purposes. In February 2026, Waymo announced a $16 billion investment round, largely funded by Alphabet.

Cash flow remained strong, with $52.4 billion in operating cash flow in Q4 and $73.3 billion in trailing twelve-month free cash flow. Alphabet ended the year with $126.8 billion in cash, cash equivalents, and marketable securities. The board declared a quarterly cash dividend of $0.21 per share, payable March 16, 2026.

Geographically, growth was broad-based, with revenue up 17% in the United States and EMEA, 22% in APAC, and 20% in Other Americas in the quarter. Alphabet’s workforce increased to 190,820 employees at year-end, reflecting continued hiring in key growth areas, particularly AI and cloud infrastructure.