Google ad revenue climbs 8.5% to $66.8 billion in Q1
Alphabet Inc., the parent company of Google, reported strong financial results for the first quarter of 2025, driven largely by growth in its core advertising business.
The company recorded total revenue of $90.23 billion for the quarter, marking a 12% increase year-on-year and surpassing analysts’ expectations of $89.1 billion. Net income rose sharply by 46% to $34.54 billion, or $2.81 per share, compared with market forecasts of $2.01 per share.
Google’s advertising segment remained the primary revenue driver, generating $66.8 billion,an 8.5% increase from the same period in 2024. This figure slightly exceeded analyst projections of $66.4 billion.
Within advertising, revenue from the “Google Search & Other” category reached $50.7 billion, up 9.8% from $46.16 billion in Q1 2024. YouTube advertising revenue grew by 10.3% to $8.93 billion, narrowly missing the estimated $8.97 billion. Growth in this segment was supported by continued investment in live sports content, monetisation of YouTube Shorts, and stricter enforcement of ad-blocking policies.
“Advertising continues to be the backbone of our revenue model,” said Philipp Schindler, Google’s Chief Business Officer, during the earnings call. He noted the role of artificial intelligence tools in improving ad performance, citing the AI Overviews feature, which now reaches 1.5 billion monthly users and contributes to increased commercial search volumes.
Alphabet also highlighted new AI-based initiatives, including virtual try-on experiences and Performance Max campaign tools, aimed at enhancing advertiser outcomes and reinforcing the company’s dominance in digital marketing.
Despite the strong financial performance, Alphabet faces mounting regulatory scrutiny. A recent federal court ruling found its ad-tech operations to constitute an illegal monopoly, adding to previous findings related to its search business. These developments could lead to structural changes within Alphabet’s $31 billion advertising division. Chief Executive Sundar Pichai, however, expressed confidence in the company’s ability to innovate and respond to regulatory developments.
Beyond advertising, Google Cloud posted revenue of $12.26 billion, up 28% year-on-year but slightly below the anticipated $12.27 billion. The cloud division reported an operating margin of 17.8%, attributed to rising demand for AI-driven enterprise solutions.
Alphabet’s “Other Bets” division and subscription offerings, such as YouTube Premium and Google One, also contributed to growth. The company now counts over 270 million paid subscriptions across its portfolio.
The results underscore Alphabet’s continued strength in digital services, despite ongoing legal challenges and increased regulatory attention.
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