Google Parent Tops $100B Revenue for First Time

AFP/APP

SAN FRANCISCO: Google parent Alphabet reported its first-ever $100 billion quarterly revenue on Wednesday, powered by strong growth across its core search business and rapidly expanding cloud division buoyed by artificial intelligence (AI).

The tech giant’s revenues jumped 16 percent year-on-year to $102.3 billion in the third quarter, beating analyst expectations and marking a major milestone for the company founded by Larry Page and Sergey Brin in 1998.

“Alphabet had a terrific quarter, with double-digit growth across every major part of our business,” said CEO Sundar Pichai in a statement.

Net income surged 33 percent to $35 billion, with the company attributing the increase to its ability to capitalize on the AI boom that is reshaping the tech landscape.

Google’s core search and advertising business remained the primary revenue driver, generating $56.6 billion, up from $49.4 billion a year earlier. YouTube advertising revenues also grew strongly to $10.3 billion from $8.9 billion.

However, it was Google Cloud that stole the spotlight, with revenues soaring 34 percent to $15.2 billion. The cloud division, which competes with Amazon Web Services and Microsoft Azure, has become a key growth engine for Alphabet.

Pichai said the company’s ambitious approach to AI “is delivering strong momentum, and we’re shipping at speed,” highlighting the global rollout of AI features in Google Search and the company’s Gemini AI models.

The company added that its Gemini App now boasts over 650 million monthly active users, with a growing share of search queries being handled through AI Mode.

However, Alphabet’s results were partially overshadowed by a $3.5 billion fine imposed by the European Commission in September for competition law violations in its ad tech business.

Excluding this penalty, operating income would have increased 22 percent instead of the reported nine percent, the company said.

The strong performance comes as Alphabet ramps up capital spending to meet surging demand for AI infrastructure. The company now expects 2025 capital expenditures of between $91 and $93 billion, reflecting massive investments in data centers and computing power to fulfill its AI ambitions.

It said capex spending would grow even more next year, though without providing specific details. Microsoft and Meta, which also reported results on Wednesday, revealed similar massive expenditures on AI infrastructure — facilities that consume more energy, strain power grids, and use significant local water resources for cooling.

Alphabet also reported having over 300 million paid subscriptions across services such as Google One and YouTube Premium.

Despite robust growth, the company’s experimental “Other Bets” division — which includes autonomous vehicle unit Waymo — posted a loss of $1.4 billion on revenues of just $344 million.

Alphabet’s shares have surged nearly 40 percent in the third quarter, with investors buoyed by the company’s success in persuading a federal judge to deny a U.S. government request that it sell off its Chrome browser in an antitrust trial.