Alphabet Inc. Reports 14% Revenue Growth to $96.4 Billion in Q2 2025

Alphabet Inc. reported a significant increase in its financial performance for the second quarter of 2025, with total revenues reaching $96.4 billion, a 14% increase from $84.7 billion in the same period last year. The growth was primarily driven by a $8.6 billion rise in Google Services revenues, which accounted for $82.5 billion, and a $3.3 billion increase in Google Cloud revenues, totaling $13.6 billion. The company's net income also saw a notable rise, reaching $28.2 billion, up from $23.6 billion a year earlier, resulting in a diluted earnings per share of $2.31, compared to $1.89 in the prior year.

In terms of operational metrics, Alphabet's Google Search & other revenues increased by $5.7 billion year-over-year, attributed to higher search queries and increased advertiser spending. YouTube ad revenues also grew by $1.1 billion, benefiting from enhanced direct response advertising products. However, Google Network revenues experienced a slight decline, primarily due to decreased AdSense and Google Ad Manager revenues. The company reported a total of 187,103 employees as of June 30, 2025, reflecting its ongoing expansion efforts.

Alphabet's strategic developments included the announcement of a pending acquisition of Wiz, a cloud security platform, for $32 billion, expected to close in 2026. This acquisition aligns with Alphabet's focus on enhancing its Google Cloud segment. The company also continued its share repurchase program, buying back $13.3 billion worth of shares in the second quarter, with $86.3 billion remaining authorized for future repurchases.

The filing indicated that Alphabet's cost of revenues increased to $39 billion, up 10% from the previous year, driven by higher traffic acquisition costs and content acquisition expenses. Operating expenses rose by 20% to $26.1 billion, largely due to legal expenses and employee compensation. The effective tax rate for the quarter increased to 16.9%, influenced by a non-deductible legal settlement and a decrease in stock-based compensation-related tax benefits.

Looking ahead, Alphabet anticipates continued growth in its business, particularly in the digital economy, and expects its revenues from non-advertising sources to rise. The company is also preparing for potential fluctuations in its traffic acquisition costs and overall margins, as well as ongoing regulatory scrutiny. The management remains optimistic about the long-term sustainability of its business model and the impact of its investments in artificial intelligence and cloud services.