Google parent Alphabet reports first $100 billion quarterly revenue, powered by AI growth in cloud and search businesses
SAN FRANCISCO: Google parent Alphabet has reported its first-ever 100 billion dollar quarterly revenue.
The tech giant’s revenues jumped 16% year-on-year to 102.3 billion dollars in the third quarter.
This performance beat analyst expectations and marked a milestone for the company founded by Larry Page and Sergey Brin in 1998.
CEO Sundar Pichai described the quarter as terrific with double-digit growth across every major part of their business.
Net income surged 33% to 35 billion dollars as the company capitalized on the artificial intelligence boom.
Google’s core search and advertising business remained the primary revenue driver with 56.6 billion dollars.
YouTube advertising revenues also grew strongly to 10.3 billion dollars from 8.9 billion dollars a year earlier.
Google Cloud stole the spotlight with revenues soaring 34% to 15.2 billion dollars.
The cloud division has become a key growth engine competing with Amazon Web Services and Microsoft Azure.
Pichai highlighted the global rollout of AI features in Google Search and the company’s Gemini AI models.
The company said its Gemini App now boasts over 650 million monthly active users.
However, the results were partially overshadowed by a 3.5 billion dollar fine from the European Commission.
This penalty was for competition law violations in Alphabet’s ad tech business.
Excluding this fine, operating income would have increased 22% instead of the reported 9%.
The strong performance comes as Alphabet ramps up capital spending to meet surging AI demand.
The company now expects 2025 capital expenditures between 91 and 93 billion dollars.
These massive investments target data centers and computing power to fulfill AI ambitions.
Alphabet also reported having over 300 million paid subscriptions across services like Google One and YouTube Premium.
Despite robust growth, Alphabet’s experimental “Other Bets” division posted a loss of 1.4 billion dollars.
This division includes autonomous vehicle unit Waymo and generated just 344 million dollars in revenue.
Google’s shares surged by nearly 40% in the third quarter amid positive investor sentiment.
Investors were also buoyed by the company’s success in an ongoing antitrust trial.
A federal judge denied a US government request that Google sell off its Chrome browser.
The judge was swayed by arguments that Google’s search engine faces stiff competition from ChatGPT and other AI chatbots. – AFP
