Alphabet Inc (NASDAQ:GOOG), Google’s parent company, reported better-than-expected fourth quarter financial results, with both revenue and earnings per share exceeding Wall Street expectations.
For the fourth quarter ended December 31, 2025, Alphabet reported consolidated revenue of $113.8 billion, up 18% year-over-year, compared with the consensus estimate of $111.3 billion.
Net income increased 30% to $32.4 billion, and adjusted earnings per share rose 31% to $2.82, above the $2.63 average consensus estimate.
The company’s Google Services segment, which includes Search, YouTube, and subscriptions, generated $95.9 billion in revenue, driven by 17% growth in both Search & other services and Google subscriptions, platforms, and devices, while YouTube ad revenue grew 9%. YouTube’s total revenue for the full year 2025 exceeded $60 billion.
Google Cloud continued its rapid expansion, with quarterly revenue rising 48% to $17.7 billion, fueled by enterprise AI infrastructure and solutions, along with growth in core Google Cloud Platform products.
Alphabet’s operating margin for the quarter was 31.6%, with operating income reflecting a $2.1 billion employee compensation charge related to Waymo.
For the full year 2025, Alphabet reported revenue of $402.8 billion, up 15% from $350 billion in 2024, and diluted earnings per share of $10.81, compared with $8.04 the previous year.
CEO Sundar Pichai highlighted the company’s AI-driven momentum, noting that the recently launched Gemini 3 platform and related services now handle over 10 billion tokens per minute through direct API use.
“It was a tremendous quarter for Alphabet and annual revenues exceeded $400 billion for the first time,” Pichai said in a statement.
He added that the company expects capital expenditures in 2026 to range between $175 billion and $185 billion to support continued growth. This was more than the $119.5 billion expected, which saw Alphabet's shares move almost 2% lower.
"Alphabet beat on both earnings and revenue, but the market took fright at the big forecast increase in capex for the year," IG chief market analyst Chris Beauchamp said. "A previous estimate of $119.5 billion was far too conservative, and the search engine giant now looks to spend 50% more. After years of Cloud revenue growth, it is now going all in to achieve a dominant position in AI."