Google parent Alphabet's revenue grows 12% to $96.5B in Q4
Alphabet announced plans to invest approximately $75 billion in capital expenditures in 2025, with a strong focus on AI research and cloud expansion.
Alphabet Inc. reported a 12% year-over-year increase in fourth-quarter revenue, reaching $96.5 billion, as growth in artificial intelligence (AI) initiatives and cloud services bolstered its financial performance.
Net income rose 28% to $26.5 billion, while earnings per share increased 31% to $2.15. Operating income grew 31% to $31 billion, with operating margins expanding five percentage points to 32%.
“Q4 was a strong quarter driven by our leadership in AI and momentum across the business,” said Sundar Pichai, CEO of Alphabet. “We are making significant progress in compute and driving efficiencies, while also launching AI-driven products at a faster pace.”
Google Services, which includes advertising from Search and YouTube, generated $84.1 billion in revenue, reflecting a 10% increase year over year. Advertising revenue reached $72.5 billion, with YouTube ads growing to $10.5 billion from $9.2 billion a year earlier.
Google Cloud revenue rose 30% to $12 billion, supported by increased demand for AI infrastructure and generative AI solutions. The segment’s operating income improved to $2.1 billion, compared to $864 million in the prior year.
Other Bets, Alphabet’s portfolio of experimental businesses, recorded revenue of $400 million, down from $657 million in the prior year, while its operating losses widened to $1.2 billion.
Alphabet repurchased $15.6 billion in stock during the quarter and initiated a quarterly dividend program, distributing $2.4 billion to shareholders. Capital expenditures totalled $14.3 billion, with investments focused on AI and data center infrastructure. The company ended the quarter with 183,323 employees, up slightly from 182,502 a year earlier.
The company announced plans to invest approximately $75 billion in capital expenditures in 2025, with a strong focus on AI research and cloud expansion. It highlighted that AI-powered advancements such as Google’s AI Overviews and Circle to Search are contributing to increased user engagement.
"Our results show the power of our differentiated full-stack approach to AI innovation and the continued strength of our core businesses. We are confident about the opportunities ahead, and to accelerate our progress, we expect to invest approximately $75 billion in capital expenditures in 2025," Pichai said.
Edited by Megha Reddy