Alphabet reported a 19% year‑on‑year surge in net profit to $28.2 billion for the April‑June quarter, powered by strong cloud expansion and accelerating adoption of artificial intelligence across its services.
Revenue climbed 14% to $96.4 billion, beating Wall Street estimates and marking another quarter of robust growth for Google’s parent company.
Google Cloud emerged as a standout performer, with sales jumping 32% to $13.62 billion. Strong uptake of core infrastructure, AI‑optimized products and generative AI tools drove the division’s performance, while the Cloud backlog, the value of signed but unrecognised contracts, grew 18% sequentially to $106 billion, signalling sustained demand.
“Our cloud business is firing on all cylinders,” CEO Sundar Pichai told analysts. “We’re seeing customers accelerate AI initiatives on Google Cloud, which is reflected in our revenue and backlog.”
To support burgeoning demand, Alphabet raised its full‑year capital‑expenditure guidance to approximately $85 billion, up from $75 billion. CFO Anat Ashkenazi said the increase reflects “additional investment in servers, the timing of delivery of servers, and an acceleration in data‑center construction, primarily to meet cloud customer demand.” She added that capex is expected to climb further in 2026 as AI workloads expand.
AI Search & Advertising Momentum
AI also drove momentum in Google’s core advertising business. Pichai highlighted the success of AI Mode, an end‑to‑end conversational search experience now live in the US and India, boasting over 100 million monthly active users.
AI Overviews, which provides concise answers to complex queries, reached more than 2 billion monthly users across 200 countries and 40 languages. “AI is positively impacting every part of the business,” Pichai noted, pointing to new features such as Deep Search and personalised responses rolling out rapidly.
YouTube delivered $9.8 billion in ad revenue during the quarter, buoyed by strong growth in key markets, including India. Meanwhile, Other Bets, Alphabet’s portfolio of experimental ventures such as Waymo, generated $373 million in revenue, reflecting continued investment in self‑driving technology, life sciences and broadband initiatives.
With AI initiatives driving product differentiation and multiyear cloud contracts underpinning future revenue streams, Alphabet appears well positioned to sustain its leadership. “We are leading at the frontier of AI and shipping at an incredible pace,” Pichai said. “Our strong quarter reflects the power of our technology and the trust customers place in Google and Alphabet.”
