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Google parent Alphabet began 2025 with a strong Q1, reporting revenues up 12% yoy to $90.2bn, or 14% in constant currency. The tech giant saw double-digit growth across all major divisions; Google Search, YouTube ads, subscriptions, and Google Cloud. Google Services generated $77.3bn, while Cloud revenues surged 28% to $12.3bn, fuelled by robust demand for AI infrastructure and generative AI solutions. Operating income rose 20%, with margins expanding to 34%, while net income jumped 46%.
CEO Sundar Pichai credited the results to Alphabet’s full-stack AI strategy. The launch of Gemini 2.5, its most advanced model to date, helped power growth across products, especially in Search, where AI Overviews now attracts over 1.5bn monthly users. Subscriptions passed 270m paid users, led by YouTube and Google One.
Still, policy and regulatory pressures could cloud Alphabet’s outlook. Pichai flagged a “slight headwind” to 2025 ad revenues due to the rollback of de minimis tariff exemptions, with Chinese retailers like Temu and Shein expected to cut spend amid steep U.S. import tariffs. Meanwhile, Alphabet faces two major antitrust cases in the U.S., one already ruling it a monopoly in ad tech, and another challenging its dominance in search. A potential forced breakup could reshape the company’s future.
Elsewhere, the company continues to deepen its roots in the UK and across Europe. Kate Alessi has been named Google’s new UK managing director, stepping into the role this June to oversee a 7,000-strong workforce (See - Google appoints Alessi as new UK MD). Google Cloud is also gaining traction with large enterprises in the UK, for example Lloyds Banking Group announced earlier this month that its ongoing transformation has taken a major step forward with the help of Google Cloud’s AI and data science capabilities (See - Google Cloud AI helps drive Lloyd's transformation). In the energy sector, Google is pushing into climate tech, announcing a series of collaborations with energy firms to deploy AI in areas such as grid optimisation and emissions forecasting (See - Google Cloud announces AI for energy and climate projects).
Posted by: Simon Baxter at 09:29