Google Cloud, AI, ads, Waymo, and more: Google earnings takeaways

Shannon Carroll

Fri, Apr 25, 2025, 12:18 PM 7 min read

Google’s parent company, Alphabet (GOOGL), was a big winner on Wall Street this week, delivering first-quarter earnings that largely surpassed expectations — and highlighted momentum across its search, cloud, and AI businesses. The report sent investors a strong signal that the company is weathering macroeconomic headwinds with diversified growth and continued strength in its core businesses.

Fueled by growth in cloud services and AI, Alphabet posted a net income of $34.5 billion on $90.2 billion in revenue — a 12% year-over-year increase that beat Wall Street’s estimate of $89.2 billion. The company also reported earnings per share of $2.81; analysts were expecting that number to be $2.01. Net income increased 46%.

The company also announced a $70 billion stock-buyback program and said it will increase its quarterly cash dividend by 5% to $0.21.

The stock popped in after-hours trading and continued to rise Friday — 1.6% around midday — buoyed by better than-expected revenue, margin expansion, and bullish sentiment from analysts who noted broad-based strength and Google’s early success in monetizing its AI tools.

“We are so back,” Wedbush analysts said about Alphabet’s earnings.

Google Search continues to be Alphabet’s revenue anchor. It’s the company’s largest ad segment, and its revenue grew almost 10% year over year to $50.7 billion, slightly ahead of the Street’s estimates.

Part of that engagement is being driven by Google’s generative AI Overviews tool, which is bolted atop the company’s search results, making it virtually unavoidable. CEO Sundar Pichai said AI Overviews “now has 1.5 billion users per month” and expanded in the first quarter to more than 15 languages across 140 countries. The company also launched “AI mode” in March for more complex queries, which Google said has received positive user feedback.

According to William Blair analysts, Alphabet is in a “good, positive cycle for search with AI,” with strong engagement trends and growing traction from new tools.

While investors had been wary about whether AI-driven search results would be less profitable than traditional search results, chief business officer Philipp Schindler said on the earnings call that the company is monetizing AI Overviews “at approximately the same rate.”

Schindler also said that AI is helping Google’s ad business better match ads to searches — letting marketers “reach customers and searches where we would not previously have shown their ads.” The company’s ad revenue was $66.8 billion (versus an expected $66.4 billion).