Executive Summary
Alphabet delivered a robust first quarter (QQ1 2025) with revenue of USD 90.234 billion, up 12.0% year over year, and a strong profitability profile led by Google Services and Google Cloud monetization. Despite a sequential revenue decline of approximately 6.5% from Q4 2024, the quarter showcased durable operating leverage and an expanded net income base, supported by solid cost controls and a healthy mix of high-margin ad and non-ad businesses. Net income rose to USD 34.54 billion, driving EPS (diluted) to USD 2.81, with a free cash flow of USD 18.95 billion and operating cash flow of USD 36.15 billion, underpinning a robust liquidity position.
Key takeaways for investors include: (1) sustained margin resilience with gross margin near 59.7% and operating margin around 33.9%, (2) a strong balance sheet with sizable cash and short-term investments and manageable debt, enabling continued investments in AI, cloud, and user experience initiatives, and (3) a growth narrative anchored in YouTube monetization, Google Services enhancements, and Google Cloud adoption, all while navigating ad-market cyclicality and regulatory risk. The combination of high-quality earnings, strong free cash flow generation, and scalable operating model supports a constructive long-term investment thesis, albeit with near-term quarterly volatility and industry-specific regulatory headwinds.
Key Performance Indicators
Key Insights
Revenue: USD 90.234B in QQ1 2025, YoY +12.0%, QoQ -6.46%.
Gross Profit: USD 53.873B, Gross Margin 59.70%, YoY +15.05%, QoQ -3.55%.
Operating Income: USD 30.606B, Operating Margin 33.92%, YoY +20.16%, QoQ -1.18%.
Net Income: USD 34.54B, Net Margin 38.28%, YoY +45.97%, QoQ +30.16%.
EPS (Reported/Diluted): USD 2.84 / 2.81, YoY +48.69%, QoQ +30.88%.
EBITDA: USD 46.31B, EBITDA Margin ~51.32%.
Operating Cash Flow: USD 36.15B; Free Cash Flow: USD 18.95B.
Capital Expenditures: USD -17.20B; Free Cash Flo...
Financial Highlights
Revenue: USD 90.234B in QQ1 2025, YoY +12.0%, QoQ -6.46%.
Gross Profit: USD 53.873B, Gross Margin 59.70%, YoY +15.05%, QoQ -3.55%.
Operating Income: USD 30.606B, Operating Margin 33.92%, YoY +20.16%, QoQ -1.18%.
Net Income: USD 34.54B, Net Margin 38.28%, YoY +45.97%, QoQ +30.16%.
EPS (Reported/Diluted): USD 2.84 / 2.81, YoY +48.69%, QoQ +30.88%.
EBITDA: USD 46.31B, EBITDA Margin ~51.32%.
Operating Cash Flow: USD 36.15B; Free Cash Flow: USD 18.95B.
Capital Expenditures: USD -17.20B; Free Cash Flow to Equity/FCF per Share: USD 1.556 per share.
Cash and Equivalents/Investments: USD 95.33B in short-term investments; USD 23.26B cash at period end; Net debt approximate USD -0.3B (negligible net leverage).
Liquidity: Current ratio ~1.77, indicating solid short-term liquidity; long-term balance sheet strength with substantial non-current assets and investments.
Valuation context (vs. peers): Enterprise Value multiple ~40.69x, Price to Sales ~20.88x, and Price to Earnings ~13.64x, suggesting a premium for durable cash generation versus some ad/tech peers.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
90.23B |
12.04% |
-6.46% |
| Gross Profit |
53.87B |
15.05% |
-3.55% |
| Operating Income |
30.61B |
20.16% |
-1.18% |
| Net Income |
34.54B |
45.97% |
30.16% |
| EPS |
2.84 |
48.69% |
30.88% |
Key Financial Ratios
operatingProfitMargin
33.9%
operatingCashFlowPerShare
$2.97
freeCashFlowPerShare
$1.56
dividendPayoutRatio
7.05%
Management Commentary
Note: The earnings transcript data were not provided in the source dataset. As a result, management quotes and thematic takeaways from the QQ1 2025 call could not be extracted or cited here. When transcript content is available, we would group insights by themes (strategy, operations, market conditions) and map them to the quantitative results above.
Forward Guidance
There is no formal forward guidance published in the provided data. However, several implicit signals can be inferred: (i) ongoing investment in AI-enabled platforms and services (including Google Cloud and AI-powered ad products) to sustain long-term growth; (ii) continued monetization expansion for YouTube through both ads and premium/non-ad offerings; (iii) disciplined capital allocation with strong free cash flow generation funding ongoing buybacks, dividends, and selective investments. Investors should monitor: (a) Google Cloud trajectory and AI product monetization, (b) ad-market demand and regulatory developments affecting online advertising, (c) maintenance of high-free cash-flow generation and potential capital returns, and (d) FX and macro tailwinds or headwinds impacting global ad spend and cloud services uptake.