Technology giant Alphabet Inc has announced a 19% increase in net income for the second quarter of the 2025 financial year (Q2 FY25), as artificial intelligence (AI) drove strong growth across the business.
The parent company of Google's search engine business said net income was US$28.2 billion (A$42.7 billion) in the quarter ended 30 June 2025 compared with $23.6 billion in the previous corresponding period.
Diluted earnings per share (EPS) jumped 22% to $2.31 on revenue which grew 14% to $96.4 billion as Google Search & other, YouTube ads, Google subscriptions, platforms, and devices and Google Cloud delivered double-digit growth.
CEO Sundar Pichai said AI was driving strong momentum in every part of the business, with Search delivering double-digit revenue growth and new features like AI Overviews and AI Mode performing well.
"We had a standout quarter, with robust growth across the company. We are leading at the frontier of AI and shipping at an incredible pace,” he said in a press release.
Pichai said Alphabet continued to see a strong performance by YouTube and subscriptions offerings and Cloud had strong growth in revenues, backlog and profitability with its annual revenue run-rate reaching more than $50 billion.
With this strong and growing demand for its Cloud products and services, the company was increasing capital expenditures (capex) in 2025 to about $85 billion.
Google Services revenues increased 12% to $82.5 billion and Google Cloud revenues increased 32% to $13.6 billion.
Operating income increased 14% to $31.3 billion but the operating margin remained at 32.4% as strong revenue growth and continued efficiencies in the expense base were partially offset by a charge related to legal settlements.
The result exceeded analysts’ expectations of an 11% increase in revenue and EPS of $2.18.
Alphabet (NASDAQ: GOOG) shares rose $2.79 (1.46%) to $194.30 in after-hours trading, having closed down 60 cents (0.31%) at $191.50, capitalising the ‘Magnificent Seven’ company at $2.31 trillion, before the results were announced.
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