- Record Annual Revenue: Alphabet's 2025 consolidated revenues hit $403 billion, a 15% YoY increase, driven by AI integration and cloud growth.
- Cloud Revenue Surge: Google Cloud revenue accelerated to $17.7 billion in Q4, up 48% YoY, with an annual run rate exceeding $70 billion.
- YouTube Revenue Milestone: YouTube's annual revenue surpassed $60 billion in 2025, fueled by subscription growth and ad monetization from Shorts and the living room.
- AI Infrastructure Scaling: Gemini 3 processed over 10 billion tokens/minute via API, and the company plans $175–185 billion in 2026 CapEx for AI compute and infrastructure.
Segment Performance
The company's Google Services segment saw revenues increase 14% to $95.9 billion, driven by strong growth in search and subscriptions. Google Cloud revenue accelerated, up 48% to $17.7 billion, driven by enterprise AI products and strong demand for infrastructure and other services. YouTube's annual revenues surpassed $60 billion, driven by strong growth in ad revenue and subscriptions.
AI-Driven Growth
Sundar Pichai highlighted the company's progress in AI, including the launch of the universal Commerce protocol and the integration of agentic experiences into Gemini AI mode. He noted that successful companies are incorporating Gemini into critical workflows, driving growth and efficiency. The company's AI investments are expected to drive significant improvements across all areas of marketing, including ads quality, advertiser tools, and new AI user experiences.
Outlook and Valuation
The company expects to see an FX tailwind to consolidated revenues in Q1 2026, with growth driven by ongoing improvements in user experience and advertiser ROI. Google Cloud is expected to continue driving strong growth despite supply constraints. With a P/E Ratio of 32.4 and an EV/EBITDA of 23.46, the company's valuation multiples suggest that the market is pricing in a high level of growth. Analysts estimate next year's revenue growth at 13.2%, which may not be sufficient to justify the current valuation multiples.
Cash Flow and Investments
Alphabet generated record operating cash flow of $52.4 billion in Q4 and $160.5 billion for the full year, translating to $24.6 billion of free cash flow in Q4 and $73.3 billion for the full year. The company ended the quarter with $120.8 billion in cash and marketable securities and $46.5 billion in long-term debt. The company's 2026 CapEx investments are anticipated to be in the range of $175 to $185 billion, with a focus on AI compute capacity, technical infrastructure, and strategic investments in Other Bets.