Alphabet(GOOG) - 2025 Q1 - Quarterly Results

Alphabet Inc. First Quarter 2025 Results Q1 2025 Financial Highlights Alphabet reported strong Q1 2025 results with double-digit revenue and operating income growth, driven by broad business momentum and AI advancements Q1 2025 Consolidated Financial Highlights (vs. Q1 2024) | Metric | Q1 2024 ($M) | Q1 2025 ($M) | % Change | | :--- | :--- | :--- | :--- | | Revenues | $80,539 | $90,234 | 12% | | Operating Income | $25,472 | $30,606 | 20% | | Operating Margin | 32% | 34% | +2 p.p. | | Net Income | $23,662 | $34,540 | 46% | | Diluted EPS | $1.89 | $2.81 | 49% | - CEO Sundar Pichai attributed the strong results to momentum across the business, underpinned by a full-stack approach to AI with the rollout of Gemini 2.5. Search saw strong growth, with AI Overviews reaching 1.5 billion monthly users, and the company surpassed 270 million paid subscriptions[2] - The company announced a 5% increase to its quarterly cash dividend, raising it to $0.21 per share[5][9] Segment Performance Google Services and Cloud segments showed strong revenue and operating income growth, with Cloud's operating income more than doubling, while Other Bets reported a wider loss Q1 2025 Segment Revenue Breakdown (in millions) | Segment | Q1 2024 ($M) | Q1 2025 ($M) | % Change | | :--- | :--- | :--- | :--- | | Google Search & other | $46,156 | $50,702 | 9.8% | | YouTube ads | $8,090 | $8,927 | 10.3% | | Google advertising (subtotal) | $61,659 | $66,885 | 8.5% | | Google subscriptions, platforms, and devices | $8,739 | $10,379 | 18.8% | | Google Services total | $70,398 | $77,264 | 9.8% | | Google Cloud | $9,574 | $12,260 | 28.1% | | Other Bets | $495 | $450 | -9.1% | Q1 2025 Segment Operating Income (in millions) | Segment | Q1 2024 ($M) | Q1 2025 ($M) | % Change | | :--- | :--- | :--- | :--- | | Google Services | $27,897 | $32,682 | 17.2% | | Google Cloud | $900 | $2,177 | 141.9% | | Other Bets | ($1,020) | ($1,226) | -20.2% | - Google Cloud's growth was led by Google Cloud Platform (GCP), specifically across core GCP products, AI Infrastructure, and Generative AI Solutions[5] Shareholder Returns Alphabet demonstrated strong commitment to shareholder returns in Q1 2025, paying $2.4 billion in dividends, increasing its quarterly dividend, and authorizing $70.0 billion in stock repurchases - The Board of Directors authorized the company to repurchase up to an additional $70.0 billion of its Class A and Class C shares[10] - A quarterly cash dividend of $0.21 per share was declared, a 5% increase from the prior $0.20 dividend. The dividend is payable on June 16, 2025[9] - Total dividend payments to stockholders amounted to $2.4 billion for the three months ended March 31, 2025[8] Consolidated Financial Statements This section provides detailed unaudited financial statements for Q1 2025, including Balance Sheets, Income Statements, and Cash Flows, offering a comprehensive view of Alphabet's financial position and performance Consolidated Balance Sheets As of March 31, 2025, Alphabet's total assets grew to $475.4 billion, driven by property and equipment and non-marketable securities, resulting in robust stockholders' equity Key Balance Sheet Items (in millions) | Account | Dec 31, 2024 ($M) | Mar 31, 2025 ($M) | | :--- | :--- | :--- | | Total cash, cash equivalents, and marketable securities | $95,657 | $95,328 | | Property and equipment, net | $171,036 | $185,062 | | Non-marketable securities | $37,982 | $51,029 | | Total assets | $450,256 | $475,374 | | Total current liabilities | $89,122 | $91,654 | | Total liabilities | $125,172 | $130,107 | | Total stockholders' equity | $325,084 | $345,267 | - A significant factor in the balance sheet change was an $8.0 billion unrealized gain on non-marketable equity securities related to an investment in a private company[11] Consolidated Statements of Income For Q1 2025, Alphabet's revenues rose to $90.2 billion, with operating income increasing to $30.6 billion, and a significant unrealized gain on equity securities boosting net income to $34.5 billion Q1 Income Statement Summary (in millions) | Account | Q1 2024 ($M) | Q1 2025 ($M) | | :--- | :--- | :--- | | Revenues | $80,539 | $90,234 | | Total costs and expenses | $55,067 | $59,628 | | Income from operations | $25,472 | $30,606 | | Other income (expense), net | $2,843 | $11,183 | | Net income | $23,662 | $34,540 | | Diluted net income per share | $1.89 | $2.81 | - Other income (expense), net, was significantly impacted by a $9.8 billion net gain on equity securities in Q1 2025, compared to a $2.2 billion gain in Q1 2024[32] Consolidated Statements of Cash Flows In Q1 2025, net cash from operating activities increased to $36.2 billion, while investing activities used $16.2 billion, and financing activities used $20.2 billion, primarily for stock repurchases and dividends Q1 Cash Flow Summary (in millions) | Activity | Q1 2024 ($M) | Q1 2025 ($M) | | :--- | :--- | :--- | | Net cash provided by operating activities | $28,848 | $36,150 | | Net cash used in investing activities | ($8,564) | ($16,194) | | Net cash used in financing activities | ($19,714) | ($20,201) | | Net (decrease) in cash and cash equivalents | $445 | ($202) | - Capital expenditures (purchases of property and equipment) increased significantly to $17.2 billion in Q1 2025 from $12.0 billion in Q1 2024[28] - The company used $15.1 billion for stock repurchases and, for the first time in the comparative period, paid $2.4 billion in dividends[28] Non-GAAP Financial Measures & Reconciliations This section reconciles GAAP to non-GAAP measures, showing Q1 2025 free cash flow of $19.0 billion and a 14% constant currency revenue growth, indicating an unfavorable foreign exchange impact Reconciliation to Non-GAAP Free Cash Flow Alphabet's free cash flow for Q1 2025 was $19.0 billion, derived from $36.2 billion in operating cash flow minus $17.2 billion in capital expenditures, with TTM free cash flow at $74.9 billion Q1 2025 Free Cash Flow Calculation (in millions) | Metric | Q1 2025 ($M) | | :--- | :--- | | Net cash provided by operating activities | $36,150 | | Less: purchases of property and equipment | ($17,197) | | Free cash flow | $18,953 | - Trailing twelve months (TTM) free cash flow as of Q1 2025 was $74.881 billion[34] Reconciliation to Non-GAAP Constant Currency Revenues In Q1 2025, reported revenue grew 12% YoY, while constant currency revenue grew 14%, indicating a 2% negative foreign exchange impact, with Other Americas showing the largest disparity YoY Revenue Growth by Geography (Q1 2025 vs Q1 2024) | Geography | As Reported % Change | Constant Currency % Change | | :--- | :--- | :--- | | United States | 13% | 13% | | EMEA | 9% | 12% | | APAC | 12% | 15% | | Other Americas | 12% | 23% | | Total Revenues | 12% | 14% | - Total revenues for Q1 2025 were $90.2 billion. After adjusting for a negative foreign exchange effect of $1.6 billion, constant currency revenues were $91.6 billion[39]