Alphabet Profit Soars 46% in First Quarter to $34.5 Billion, Helped by AI-Assisted Search, YouTube Ads

Alphabet, the parent company of Google and YouTube, reported its first quarter earnings for 2025 on Thursday. The company’s profit increased 46% year-over-year owing to Google Search, which saw a boost in part thanks to the largest expansion to date for AI Overviews. The corporation also saw growth in YouTube ads; Google subscriptions, platforms and devices; and Google Cloud.

Here are the key takeaways:

Net Income: Grew 46% year-over-year to $34.54 billion for the quarter

Earnings Per Share: $2.81 compared to $2.03 per share expected by analysts surveyed by Zacks Investment Research

Revenue: Grew 12% year-over-year to $90.23 billion for the quarter

YouTube Ad Revenue: Grew 10% year-over-year to $8.93 billion

Google Subscriptions, Platforms and Devices: Grew 19% year-over-year to $10.38 billion

Earnings from Google Search and other hit $50.7 billion, a 9.8% increase compared to the first quarter of 2024. Altogether, the Google Services division — which includes Google search, YouTube ads, Google network as well as subscriptions, platforms and devices — increased 9.7% year-over-year, bringing in $77.26 billion.

As for Google Cloud, that accounted for $12.26 billion, a 28% year-over-year increase.

“We’re pleased with our strong Q1 results, which reflect healthy growth and momentum across the business. Underpinning this growth is our unique full stack approach to AI,” Alphabet CEO Sundar Pichai said in a latter to shareholders. Specifically, Pichai highlighted the rollout of the company’s AI model Gemini 2.5.

“Search saw continued strong growth, boosted by the engagement we’re seeing with features like AI Overviews, which now has 1.5 billion users per month. Driven by YouTube and Google One, we surpassed 270 million paid subscriptions. And Cloud grew rapidly with significant demand for our solutions,” Pichai continued.

Despite its position as a market leader, Alphabet may be in a more precarious place looking forward. The tech giant is currently in the middle of an arms race in the AI space, which is the currently the most competitive in the industry. The company may also be impacted by President Donald Trump’s tariffs. Tech products like phones, computers and chips were excluded from the Trump’s tariff push, but the move could impact advertiser spending — a major financial driver for YouTube — as more companies tighten their belts.

Alphabet answered a question about these potentially worrying macroeconomic conditions, noting that the company is still planning to invest approximately $75 billion in capital expenditures in 2025.

There’s also the antitrust lawsuit against Google that eventually may impact the company. Earlier this month, a U.S. District Court held that Google violated antitrust law, agreeing that it monopolized open-web digital advertising markets.

More to come …

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