Alphabet(US:GOOG) ZACKS·2025-07-24 16:55Core Insights - Alphabet's second-quarter 2025 earnings per share (EPS) of $2.31 exceeded the Zacks Consensus Estimate by 7.44% and represented a year-over-year growth of 22.2% [1][10] - The company's shares rose approximately 3.3% in pre-market trading following the strong earnings report [1] Revenue Performance - Total revenues reached $96.43 billion, marking a year-over-year increase of 13.8% (13% at constant currency) [2] - Net revenues, excluding traffic acquisition costs (TAC), were $81.72 billion, surpassing the consensus estimate by 2.2% and growing 14.5% year over year [2] - TAC amounted to $14.71 billion, reflecting a year-over-year increase of 9.8% [2] Segment Analysis - Google Cloud revenues surged 31.7% year over year to $13.62 billion, accounting for 14.1% of total revenues and beating the Zacks Consensus Estimate by 4.24% [3] - Google Services revenues increased 11.7% year over year to $82.54 billion, representing 85.6% of total revenues and exceeding the consensus estimate by 3.28% [4] - Google advertising revenues rose 10.4% year over year to $71.34 billion, making up 74% of total revenues and beating the consensus mark by 3% [5] - Search and other revenues increased 11.7% year over year to $54.19 billion, surpassing the Zacks Consensus Estimate by 3.04% [5] - YouTube's advertising revenues improved 13.1% year over year to $9.77 billion, beating the consensus mark by 2.9% [5] - Google Network revenues decreased 1.2% year over year to $7.35 billion but still beat the consensus mark by 2.88% [6] - Google subscriptions, platforms, and devices revenues were $11.2 billion, up 20.3% year over year, exceeding the consensus mark by 4.72% [6] - Other Bets' revenues were $373 million, up 2.2% year over year, but missed the consensus mark by 12.16% [6] Operating Performance - Total costs and operating expenses were $65.16 billion, up 13.7% year over year, with the operating margin expanding to 32.4%, an increase of 10 basis points year over year [7] - Google Services' operating margin was 40.1%, contracting 10 basis points year over year [7] - Google Cloud's operating income was $2.83 billion, compared to $1.17 billion in the same quarter last year [7] - Other Bets reported a loss of $1.25 billion, compared to a loss of $1.13 billion in the year-ago quarter [8] Financial Position - As of June 30, 2025, cash, cash equivalents, and marketable securities totaled $95.15 billion, slightly down from $95.33 billion as of March 31, 2025 [11] - Long-term debt increased to $23.61 billion as of June 30, 2025, from $10.89 billion as of March 31, 2025 [11] - Alphabet generated $27.75 billion of cash from operations in Q2 2025, down from $36.15 billion in Q1 2025, with capital expenditures of $22.45 billion, resulting in a free cash flow of $5.3 billion [12] Capital Expenditure Guidance - For 2025, Alphabet expects to spend $85 billion on capital expenditures, indicating a proactive approach to investment [13]