Search’s moat, cloud’s profits, and the GPU bill.
Alphabet FY2025 revenue was $402.8B (+15%), net income $132.2B (+32%); Google Cloud revenue cleared $58.7B for the first time, with full-year operating income of $13.9B — cloud has officially crossed from “burning cash” into “structural profitability.” In parallel, capex surged from FY2024’s $52.5B to $91.4B (+74%) on a record investment in data centers and in-house TPU / Nvidia GPUs. This report is built from the most recent three SEC filings — FY2025 10-K, Q3 2025 10-Q, Q2 2025 10-Q.
Quick numbers
| Item | Value |
|---|---|
| Ticker | NASDAQ : GOOGL / GOOG |
| CIK | 0001652044 |
| FY25 Revenue | $402.8B (+15.1%) |
| Net income | $132.2B (+32.0%) |
| Cloud | $58.7B (+35.8%) |
| Capex | $91.4B (+74.1%) |
§01 · Key Metrics — the year at a glance
Image: Wikimedia Commons / CC BY-SA 4.0.
| KPI | Value | Notes |
|---|---|---|
| FY2025 Revenue | $402.8B · YoY +15.1% | FY2024: $350.0B · FY2023: $307.4B |
| FY2025 Net income | $132.2B · YoY +32.0% | Diluted EPS $10.81 vs FY24 $8.04 |
| Operating income | $129.0B · YoY +14.8% | Operating margin 32.0%, in line with prior year |
| Free cash flow | $73.3B · +0.7% YoY | OCF $164.7B − Capex $91.4B |
| Cash + marketable securities | $126.8B · +32.6% | Cash $30.7B · securities $96.1B |
| Google Cloud revenue | $58.7B · +35.8% | Operating income $13.9B · margin 23.7% |
| Capex | $91.4B · +74.1% | FY24: $52.5B · data centers + GPU/TPU |
| Buybacks + dividends | $55.6B · −20.1% | Buybacks $45.4B · dividends $10.2B |
FY2025 is the year Alphabet delivered on the dual storyline of “cloud profitability + capital reinvestment”: Google Cloud operating margin rose from 14% to 23.7%; Google Search & other added another $26.4B in revenue (holding up against the AI-search displacement narrative); and capex hit a record 22.7% of revenue — “burn capital to win the AI lane while letting search and cloud cash-flow it” is the defining theme of the year.
— Synthesis of 10-K / 10-Q disclosures; data not independently audited
§02 · Business — services, cloud, bets
Revenue mix · three reporting segments
Google Services is still 85.1% ($342.7B), Google Cloud is 14.6% ($58.7B), Other Bets just 0.4% ($1.5B). Cloud’s share has climbed steadily from 10.8% (FY23) to 12.4% (FY24) to 14.6% — the structural shift is clear.
Google Services internal split
Search & other ($224.5B) is 65% of Services on its own; YouTube ads $40.4B (12%), Network $29.8B (9%), and Subscriptions / Platforms / Devices (YouTube TV, Premium, Google One, Play, Pixel, etc.) $48.0B (14%) — subscriptions YoY +19%, the most active monetization line outside ads.
Cloud revenue by quarter
Cloud rose sequentially from $12.3B in Q1 to $17.7B in Q4, with quarterly YoY growth steady in the 30%–40% range; Q4 operating margin we estimate at ~30%. Revenue backlog of $242.8B, ~55% of which will be recognized within 24 months.
Capex · FY23 → FY25
Capex has 2.8בd in two years: $32.3B → $52.5B → $91.4B. The bulk is data center build-out + in-house TPU v7 + Nvidia Blackwell purchases. Management has further guided FY2026 capex higher, which will pressure FCF.
Quarterly revenue and YoY · 2025
Quarterly revenue scaled linearly; Q4 broke $113.8B at +17% YoY. Q4 growth re-accelerated, helped by Cloud delivery and stronger ad CPMs.
Geographic revenue · by customer billing address
FY2025 · USD millions (share %).
| Region | FY 23 | FY 24 | FY 25 | Share |
|---|---|---|---|---|
| United States | 146,286 | 170,447 | 194,229 | 48 % |
| EMEA | 91,038 | 102,127 | 117,152 | 29 % |
| APAC | 51,514 | 56,815 | 67,680 | 17 % |
| Other Americas | 18,320 | 20,418 | 23,902 | 6 % |
| Hedging | 236 | 211 | (127) | 0 % |
| Total | 307,394 | 350,018 | 402,836 | 100 % |
§03 · P&L — scale, TAC and the AI capex shadow
Income statement · consolidated (3 years)
YE 12/31 · USD millions.
| Item | FY 23 | FY 24 | FY 25 | YoY |
|---|---|---|---|---|
| Total revenue | 307,394 | 350,018 | 402,836 | +15.1% |
| › Google Services | 272,543 | 304,930 | 342,721 | +12.4% |
| › Google Cloud | 33,088 | 43,229 | 58,705 | +35.8% |
| › Other Bets | 1,527 | 1,648 | 1,537 | −6.7% |
| Cost of revenue (incl. TAC) | 133,332 | 146,306 | 162,535 | +11.1% |
| › of which TAC | — | 54,900 | 59,926 | +9.2% |
| R&D | 45,427 | 49,326 | 61,087 | +23.8% |
| Sales & marketing | 27,917 | 27,808 | 28,693 | +3.2% |
| G&A | 16,425 | 14,188 | 21,482 | +51.4% |
| Total costs | 223,101 | 237,628 | 273,797 | +15.2% |
| Operating income | 84,293 | 112,390 | 129,039 | +14.8% |
| Other income (loss) | 1,424 | 7,425 | 29,787 | +301% |
| Income tax | 11,922 | 19,697 | 26,656 | +35.3% |
| Net income | 73,795 | 100,118 | 132,170 | +32.0% |
| Basic EPS | $5.84 | $8.13 | $10.91 | +34.2% |
| Diluted EPS | $5.80 | $8.04 | $10.81 | +34.5% |
G&A jumped largely on the Q3 2025 $3.5B EU antitrust fine accrual; the swing in other income mostly reflects $24.6B of fair-value gains on equity securities.
Segment operating income (3 years)
Three storylines:
Services: $95.9B → $121.3B → $139.4B (+15%)
Cloud: $1.7B → $6.1B → $13.9B (+127%)
Other Bets: −$4.1B → −$4.4B → −$7.5B (losses widened on Waymo & Verily investment)
Alphabet-level: −$9.2B → −$10.5B → −$16.8B (incl. $3.5B EU fine + concentrated AI R&D)
§04 · Balance — $127B cash, $247B PP&E
Consolidated balance sheet · 12/31
FY2024 vs FY2025 · USD millions.
| Item | 2024 | 2025 | Δ |
|---|---|---|---|
| Cash & equivalents | 23,466 | 30,708 | +7,242 |
| Marketable securities | 72,191 | 96,135 | +23,944 |
| › Cash + securities total | 95,657 | 126,843 | +31,186 |
| Accounts receivable | 52,340 | 62,886 | +10,546 |
| Current assets | 163,711 | 206,038 | +42,327 |
| Non-marketable equity | 37,982 | 68,687 | +30,705 |
| PP&E, net | 171,036 | 246,597 | +75,561 |
| Operating lease assets | 13,588 | 15,221 | +1,633 |
| Goodwill | 31,885 | 33,380 | +1,495 |
| Total assets | 450,256 | 595,281 | +145,025 |
| Current liabilities | 89,122 | 102,745 | +13,623 |
| Long-term debt | 10,883 | ~46,400 | +35,500 |
| Total liabilities | 125,172 | 180,016 | +54,844 |
| Stockholders’ equity | 325,084 | 415,265 | +90,181 |
Long-term debt rose sharply in 2025: to fund AI capex and buybacks the company issued multiple tranches of senior notes (2028–2065 maturities).
Capex vs PP&E, net
PP&E, net rose from $171B to $246.6B — equivalent to rebuilding Alphabet’s physical infrastructure base over two years.
Three share classes · voting structure
Class A (1 vote) / Class B (10 votes) / Class C (0 votes).
| Class | Shares | Voting share |
|---|---|---|
| Class A · GOOGL · 1× | 5,822M | 45% |
| Class B · 10× voting | 837M | 52.7% (Page & Brin) |
| Class C · GOOG · no vote | 5,438M | 0% |
By share count, C is 45%, A is 49%, and B just 7%, but Class B carries 10× voting power — Larry Page & Sergey Brin together hold ~89.3% of the B shares, giving them roughly 52.7% of the vote (as of 2025-12-31). The two co-founders retain decisive control.
§05 · Cash Flow — from $165B OCF to $91B of servers
OCF / Capex / FCF · 3 years
OCF rose from $125B to $164.7B (+31%); but capex jumped from $52.5B to $91.4B (+74%), keeping FCF essentially flat at $73.3B. FCF / net income = 0.55, well below the ≥1 typical for services-only peers — characteristic of a capital cycle.
Shareholder returns · buybacks + dividends
FY25 buybacks of $45.4B (-27% vs FY24’s $62.0B as funding shifted toward capex); dividends scaled up: from FY24’s $7.5B initiation to $10.2B in FY25 ($0.83/share). Total shareholder return was $55.6B for the year, with buybacks + dividends / FCF = 76%.
Cash flow takeaways
- OCF still expanding, but FCF enters a “heavy-capex era”. OCF +31%, capex +74%; capex / OCF rose from 42% to 55% — still healthy, but the FCF curve has clearly flattened. Management has guided 2026 capex up again.
- SBC stable around $25B. FY23 $22.5B → FY24 $22.8B → FY25 $25.0B; as a share of revenue, slowly down from 7.3% to 6.2%, on the lower end among large-cap tech peers.
- Dividend initiated, but not yet at “steady state”. A first cash dividend of $0.20/quarter in Q2 2024; $0.21/quarter in 2025 → $0.83 for the year — still only 14% of FCF, with ample room to scale up.
- Long-term debt issued to fund capex. FY25 long-term debt rose from $10.9B to about $46.4B; multiple senior notes (2028–2065 maturities) issued at AA+/AA — the classic “amplify capital returns at low rates” play.
§06 · Leadership — Pichai + Ashkenazi + the founders
Named Executive Officers
Below are the named executives identified in the FY2025 10-K signature page (filed 2026-02-05) and in the proxy delegations. The major personnel change in the period was Anat Ashkenazi taking over as CFO in July 2024, with Ruth Porat moving to President & Chief Investment Officer continuing to lead Other Bets and long-term investments — FY2025 ran smoothly, with no additional Item 5.02 disclosures.
| Role | Name | Notes |
|---|---|---|
| CEO · Director | Sundar Pichai | Chief Executive Officer (Principal Executive Officer) · Director. Took over as Google CEO in 2015, also serving as Alphabet CEO since 2019. Indian-born; over 20 years at Google. Drove the modernization of Search / Chrome / Android, and the Gemini model line and AI infrastructure investments of the past three years. The board charter requires the CEO to have Class B founder support to serve. |
| CFO · SVP | Anat Ashkenazi | Senior VP & Chief Financial Officer. Joined Alphabet in July 2024 from Eli Lilly (where she had been CFO for 3 years), becoming the company’s second CFO. Known for cost discipline + long-horizon capital planning; the FY2025 G&A expansion was partly driven by legal accruals and reorganization activity she led. Co-signs the 10-K with Pichai. |
| President · CIO | Ruth M. Porat | President & Chief Investment Officer. Joined as CFO in 2015; promoted to President & CIO in July 2024, leading Other Bets (Waymo, Verily, Calico) and long-term capital allocation. The 10-K discloses she signed a new Rule 10b5-1 plan on 2025-11-29, with sales of up to 154,486 Class C shares starting 2026-03-02. |
| PCAO | Amie Thuener O’Toole | VP & Principal Accounting Officer. Leads accounting policy, financial reporting, and internal controls for Alphabet group; signs the 10-K as Principal Accounting Officer. Long-tenured inside Google’s finance organization; succeeded prior signatories of past Alphabet annual reports. |
Key personnel / governance changes
2024 – 2025 · 10-Q / 10-K / 8-K disclosures.
- 2024-06. Announced Anat Ashkenazi would become CFO; Ruth Porat moves to President & CIO.
- 2024-Q2. First cash dividend declared ($0.20 / quarter) + a $70B repurchase authorization.
- 2025-Q2. Google Cloud operating margin breaks 20% for the first time; capex guidance raised again.
- 2025-Q3. Accrued the $3.5B EU antitrust fine (Google Ad Tech), affecting Alphabet-level expense.
- 2025-Q4. DOJ Search antitrust remedies still on appeal; AI Overviews live in roughly 40 countries.
Board of Directors
10 directors · 2026-02 10-K signature page.
| Director | Role |
|---|---|
| John L. Hennessy | Chair · Independent |
| Sundar Pichai | CEO · Director |
| Larry Page | Co-Founder |
| Sergey Brin | Co-Founder |
| Frances H. Arnold | Independent |
| R. Martin Chávez | Independent |
| L. John Doerr | Independent |
| Roger W. Ferguson Jr. | Independent |
| K. Ram Shriram | Independent |
| Robin L. Washington | Independent |
Of 10 directors, 8 are independent, but Class B shares are essentially all held by Page/Brin — the two co-founders together control ~52.7% of the vote. Alphabet remains in substance a founder-controlled “tri-class” company. The independent board structure is effectively constrained on buyback / M&A / charter matters.
§07 · Risk — what could derail the AI-cloud bet
- Sustained antitrust pressure · DOJ Search + EC Ad Tech. After losing the US DOJ Search antitrust case the company has entered the remedies phase (potential forced spinoff of Chrome or curbs on default-search payments); FY2025 also booked a $3.5B fine in the EU Ad Tech case. Regulation is structurally weakening two pillars of the moat — “default search distribution” and the “vertical integration of the ad-tech stack.” Alphabet has appealed, but cash-flow and business-structure risk are material.
- AI-era search-paradigm shift. AI Overviews, ChatGPT Search, Perplexity and others are reshaping how users enter queries. The 10-K acknowledges “AI is rapidly transforming the advertising industry” — if users get answers directly from AI overviews, the traditional 10-blue-links and click-cost model gets squeezed. Search & other still added $26.4B in FY25, but growth depended on CPM (+7%) and queries (+6%) — structural risk surfaces over a 1–2 year horizon.
- Cloud competition and capex payback cycle. Capex jumped from $52.5B to $91.4B, mostly into AI servers and TPU v7 + Nvidia Blackwell. AWS / Azure are also scaling capex; cloud price wars continue. If Gemini enterprise adoption underperforms, or AI infrastructure ends up in oversupply, depreciation will pressure the income statement on a 5–6 year tail, and operating-margin pressure starts from 2026.
- Ad cyclicality + global macro. Over 70% of revenue is still ads, highly correlated with global GDP and consumer confidence. A US/Europe recession or a post-election ad-budget squeeze pressures Search, YouTube and Network simultaneously; TikTok, Meta Reels and Amazon Ads continue to compete for attention.
- China and geopolitics. The Chinese market has never been directly monetized; Android / Chrome / YouTube / Play are restricted in China. But on the supply-chain side, Pixel and data-center hardware still depend on China upstream; potential Taiwan-Strait export controls or tighter China AI-chip restrictions would disrupt capex and supply cadence. The 10-K lists China as a dedicated geopolitical risk.
Bottom line · Search is still the cash engine, Cloud is the #2 growth driver, and capex is the “numerator” of the story.
Alphabet’s FY2025 reads as both offense and defense:
- Google Services still expanding +12% — not eaten by AI
- Google Cloud margins from 14% → 23.7%, structural profit delivered
- Capex ramped to $91B — and 2026 keeps accelerating
- Founders still control 52.7% of voting through Class B
“Earned a Microsoft, spent an Oracle, built an AWS” — Alphabet in FY2025.
§08 · Valuation — valuation in context
GOOGL current valuation
Data as of 2026-04-17 · close.
| Metric | Value |
|---|---|
| Price | $341.68 |
| Market cap | $4.11T |
| P/E (TTM) | 31.4× |
| P/S (TTM) | 10.2× |
| EV/EBITDA | 23.1× |
| FCF Yield | 2.0% |
| 52W range | $146.10–$349.00 |
Peer benchmark
TTM multiples · latest.
| Ticker | Price | Mkt cap | P/E | P/S | EV/EBITDA | FCF Yield |
|---|---|---|---|---|---|---|
| GOOGL | $341.68 | $4.11T | 31.4× | 10.2× | 23.1× | 2.0% |
| MSFT | $422.34 | $3.14T | 26.5× | 10.3× | 16.0× | 2.6% |
| AMZN | $250.56 | $2.69T | 35.0× | 3.8× | 18.9× | 0.4% |
| META | $686.97 | $1.74T | 26.8× | 8.8× | 15.6× | 2.9% |
On a TTM basis, GOOGL trades at 31.4× P/E and 23.1× EV/EBITDA — the most expensive among the four mega-caps — the inverse of the historical “discount for search cyclicality + antitrust overhang” narrative: the market has already priced in the Gemini moat, Cloud’s 23.7% margin, and FY25 net income +32%. MSFT (16.0×) and META (15.6×) on EV/EBITDA are clearly cheaper — the former because the AI-capex story has long duration and a stable revenue base, the latter because Reality Labs losses still drag the multiple. AMZN at 34.8× P/E but only 0.4% FCF Yield shows the extreme of “thin retail margin + AWS reinvestment” — the 2026 ~$200B capex guide nearly absorbs all free cash flow.
The FCF Yield ranking (META 2.9% ≈ MSFT 2.6% > GOOGL 2.0% >> AMZN 0.4%) makes the differential AI-capex burn most intuitive: the four together have FY2026 capex guidance approaching $500B — all burning their own cash for compute — yet GOOGL is the most expensive of the three other mega-caps. That requires Cloud to keep growing +35% and Search to hold up against AI substitution — the most fragile “prior” in the current valuation.