Executive Summary
Alphabet delivered a solid QQ3 2025 performance with broad-based strength across core businesses. Revenue of $102.346 billion rose 15.95% year over year and 6.14% quarter over quarter, underpinned by resilient advertising demand, continued monetization of YouTube, and buoyant Google Cloud activity. Gross margin extended to 59.6% while operating margin stood at 30.5%, contributing to a net margin of 34.2% and earnings per share of $2.89 (diluted $2.87). The company generated substantial cash flow, with operating cash flow per share at $4.01 and free cash flow per share at $2.02, supported by a cash balance per share of $8.15 and a conservative balance sheet with low leverage.
The quarterly results reinforce Alphabet’s differentiated mix: Google Services remains the dominant driver, the Google Cloud segment continues to scale, and Other Bets progress remains a longer-term growth lever. Management commentary has emphasized continued investments in AI, cloud infrastructure, and platform monetization. While the core ad business benefits from an improving digital ads environment, Alphabet faces ongoing macro and regulatory risks, as well as competitive pressures from peers like Meta and Microsoft. Given the current trajectory, Alphabet appears well-positioned to sustain solid profitability and cash generation, though revenue growth may normalize as ad-market dynamics evolve and AI-related investments mature.
Key Performance Indicators
Key Insights
Revenue: 102.346B, YoY +15.95%, QoQ +6.14% | Gross Profit: 60.977B, Gross Margin 59.6%, YoY +17.73%, QoQ +6.25% | Operating Income: 31.228B, Operating Margin 30.5%, YoY +9.49%, QoQ -0.14% | Net Income: 34.979B, Net Margin 34.18%, YoY +32.99%, QoQ +24.06% | EPS: 2.89 (diluted 2.87), YoY +35.05%, QoQ +24.03%
Liquidity and cash flow: Operating Cash Flow per Share 4.01, Free Cash Flow per Share 2.02, Cash per Share 8.15, Payout Ratio 7.25% | Efficiency and leverage: Debt Ratio 6.28%, Long-term Deb...
Financial Highlights
Revenue: 102.346B, YoY +15.95%, QoQ +6.14% | Gross Profit: 60.977B, Gross Margin 59.6%, YoY +17.73%, QoQ +6.25% | Operating Income: 31.228B, Operating Margin 30.5%, YoY +9.49%, QoQ -0.14% | Net Income: 34.979B, Net Margin 34.18%, YoY +32.99%, QoQ +24.06% | EPS: 2.89 (diluted 2.87), YoY +35.05%, QoQ +24.03%
Liquidity and cash flow: Operating Cash Flow per Share 4.01, Free Cash Flow per Share 2.02, Cash per Share 8.15, Payout Ratio 7.25% | Efficiency and leverage: Debt Ratio 6.28%, Long-term Debt to Capitalization 8.02%, Cash Flow to Debt 1.436x, Asset Turnover 0.191x, Receivables Turnover 1.791x, Fixed Asset Turnover 0.429x | Valuation and quality metrics: P/E 21.0x, P/S 28.71x, P/FCF 120.11x, P/OCF 60.69x, EV/Revenue not explicitly provided, Price-to-Book 7.59x, Price-to-Operating-Cash-Flows 60.69x, Dividend Yield 0.0863%, Enterprise Value Multiple 94.43x
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
102.35B |
15.95% |
6.14% |
| Gross Profit |
60.98B |
17.73% |
6.25% |
| Operating Income |
31.23B |
9.49% |
-0.14% |
| Net Income |
34.98B |
32.99% |
24.06% |
| EPS |
2.89 |
35.05% |
24.03% |
Key Financial Ratios
operatingProfitMargin
30.5%
operatingCashFlowPerShare
$4.01
freeCashFlowPerShare
$2.02
dividendPayoutRatio
7.25%
Management Commentary
No earnings call transcript data provided in the supplied materials. Consequently, there are no management quotes or theme-based highlights to extract yet.
Forward Guidance
No formal forward guidance was provided in the supplied materials. Based on the disclosed results and industry dynamics, a cautious base-case view suggests mid-to-high single-digit revenue growth in the near term with continued expansion of Google Cloud and YouTube monetization, offset by ongoing ad-market cyclicality and regulatory scrutiny. An upside scenario could materialize if AI-enabled advertising and enterprise cloud demand accelerate faster than anticipated, supported by higher operating leverage as the services mix tilts toward higher-margin offerings. A bear scenario would involve a sharper moderation in advertising demand or slower cloud adoption, pressuring margins and cash generation.
Key factors investors should monitor: (1) ad revenue growth and resilience amid privacy changes and regulatory developments; (2) Google Cloud growth trajectory and enterprise adoption of AI/ML offerings; (3) Operating margin progression as AI investments scale; (4) free cash flow generation and capital allocation (repatriation, buybacks, and potential dividends); (5) ongoing regulatory and geopolitical risks impacting large-cap tech platforms.