Alphabet (GOOG) delivered a standout Q2 2025, with strong, double-digit growth across key business lines and continued momentum in AI innovation and infrastructure investment. Total revenue climbed to $96.4 billion, marking a 14% year-over-year increase, while net income surged 19% to $28.2 billion. Profitability remained solid, with operating income up 14% to $31.3 billion, holding the operating margin steady at 32.4%. Earnings per share rose sharply, with diluted EPS increasing 22% to $2.31. The company also maintained a robust cash position, ending the quarter with $95.1 billion in cash and marketable securities.

Google Services delivered $82.5 billion in revenue, up 12%, driven by strength in Search & Other ($54.2B, +12%), YouTube Ads ($9.8B, +13%), and Subscriptions, Platforms, and Devices ($11.2B, +20%). Notably, YouTube Shorts reached parity in monetization per watch hour with traditional in-stream ads in the U.S., and connected TV (CTV) ads led to over 1 billion conversions over the past year. Despite a slight decline in Google Network revenue ($7.4B, -1%), overall operating income for the segment held firm at $33.1 billion, with a margin of 40.1%.

Google Cloud was a standout performer, with revenue jumping 32% to $13.6 billion and operating income more than doubling to $2.8 billion, yielding a margin of 20.7%—up from 11.3% a year ago. The cloud backlog swelled to $106 billion, up 38% YoY, reflecting heightened demand, especially in AI. Over 85,000 enterprises are now building with Gemini, Alphabet’s AI model suite, fueling 35x growth in usage year-over-year.

Other Bets posted modest revenue of $373 million, with the operating loss widening to $1.25 billion. However, Waymo made notable progress, expanding into Atlanta and growing its footprint in Austin and the San Francisco Bay Area, surpassing 100 million autonomous miles driven.

AI was the common growth engine across Alphabet’s ecosystem. Gemini 2.5 is now used by 9 million developers, and AI Overviews reach over 2 billion monthly users across 200+ countries and 40 languages. These capabilities are helping drive increased engagement and monetization in Search, YouTube, and subscriptions.

Infrastructure investment remains a top priority, with Q2 CapEx hitting $22.4 billion, mostly allocated to servers and data centers. Full-year CapEx guidance has been raised to ~$85 billion, with additional increases expected in 2026 to support AI and cloud growth.

Shareholder returns remained strong, with $13.6 billion in share repurchases and $2.5 billion in dividends during the quarter. The quarterly dividend was raised 5% to $0.21 per share, and $86.3 billion remains authorized for future buybacks. Additionally, Alphabet issued $12.5 billion in senior unsecured notes to support its long-term initiatives.

Looking ahead, management expects continued strength across the business but flagged potential headwinds in H2 advertising due to tough comps, including 2024 election spending. While cloud demand is strong, growth may be nonlinear due to infrastructure delivery timing. Expenses will rise in Q3 with increased depreciation and headcount additions, including hiring new graduates and supporting product launches like the August Pixel refresh.

CEO Sundar Pichai emphasized AI's growing impact across Alphabet’s portfolio, while CFO Anat Ashkenazi highlighted ongoing discipline in spending, even as investment ramps up to meet surging demand. With strong financial performance, accelerating AI adoption, and increasing infrastructure scale, Alphabet appears well-positioned for sustained growth through 2025 and beyond.