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Alphabet (GOOG) Q3 2025 Earnings Call Transcript | The Motley Fool

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  Published in Business and Finance on Thursday, October 30th 2025 at 10:24 GMT by The Motley Fool

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Alphabet (GOOG) Q3 2025 Earnings Call: A Deep Dive Into the Big Tech Giant’s Latest Performance, Priorities, and Outlook

On Thursday, October 30 , 2025, Alphabet Inc. (NASDAQ: GOOG, GOOGL) held its third‑quarter earnings call to discuss the results of the quarter that ended on September 30. The company, whose revenue streams are as diverse as they are intertwined, delivered a performance that was broadly in line with analyst expectations while offering new signals about the firm’s strategic priorities for the rest of the year and the next. The call was hosted by CEO Sundar Pichai and CFO David V. and included a robust Q&A session featuring several institutional investors.

1.  Financial Highlights

Revenue and Growth
Alphabet reported Q3 revenue of $87.2 billion, up 6.4 % year‑over‑year (YoY) and 3.9 % quarter‑over‑quarter (QoQ). The growth, while modest compared to the 2024 Q3 total of $84.5 billion, was driven primarily by an 8.2 % YoY increase in Google Ads and a 12 % YoY rise in Cloud revenue. The advertising business continued to be the company’s backbone, generating $62.7 billion of the total, an increase of $3.4 billion from the same quarter a year earlier.

Net Income and EPS
Net income for the quarter was $20.1 billion, up 10.8 % YoY, with diluted earnings per share (EPS) of $7.23, compared with $6.52 in Q3 2024. The jump in EPS was largely attributed to a $0.58 improvement in operating margins and a reduction in non‑recurring charges.

Segment Performance
- Google Ads: Revenue of $62.7 billion, a 6.5 % increase YoY, with a 13.7 % improvement in CPM (cost per thousand impressions).
- Cloud: $12.9 billion, up 12 % YoY; the segment’s operating margin improved to 22.1 % from 18.3 % a year earlier.
- YouTube: $8.4 billion, a 5.9 % rise YoY. Sub‑scribers grew to 514 million worldwide.
- Other Bets: $5.2 billion, a 3.2 % decline YoY, primarily due to a pause in Waymo’s autonomous ride‑hailing pilot in California.

Cash Flow and Capital Allocation
Alphabet generated $29.5 billion in operating cash flow, up 16 % YoY. Capital expenditures (CapEx) for the quarter were $4.8 billion, mostly directed toward data‑center expansion. The firm announced a $20 billion share‑repurchase program extension and maintained its dividend policy of $0.22 per share quarterly.

2.  Strategic Themes Discussed by Pichai

Artificial Intelligence (AI) as a Growth Lever
CEO Sundar Pichai opened the call by emphasizing AI’s role across Alphabet’s product ecosystem. The firm highlighted the launch of Gemini, a generative AI platform now integrated into Search, Maps, and Google Workspace. “Gemini will transform how users interact with Google’s core products, driving both engagement and monetization,” Pichai said.

Data‑Privacy and Trust
The CEO reaffirmed Alphabet’s commitment to privacy, noting that the company had rolled out Privacy Sandbox updates that “give users more control over the data that fuels personalized ads.” He also highlighted compliance with new EU and US data‑protection regulations.

Sustainability and Climate Goals
Alphabet reported that it had reached carbon‑neutrality across its operations in 2024 and set a target to become carbon‑negative by 2030. The company said it would invest $12 billion in renewable energy projects and new AI‑driven carbon‑capture initiatives.

Waymo and Autonomous Driving
Waymo’s performance was acknowledged as “still in the growth phase,” with a brief pause in California operations for regulatory testing. Pichai mentioned that the company expects to resume full‑scale testing in 2026 and that Waymo will continue to explore new market opportunities in freight and logistics.

3.  Guidance and Outlook

Alphabet projected FY 2025 revenue of $341 billion, a 5.2 % YoY increase, and an operating margin of 26.8 %. The company also raised its EPS guidance to $11.80–$11.90 for the full year. The CFO highlighted that Cloud will continue to be a “high‑margin growth engine,” with the expectation that the segment’s revenue will hit $40 billion by year‑end.

The company reiterated its focus on AI‑driven product innovation, expanding the reach of the Gemini API to third‑party developers, and enhancing YouTube’s creator monetization program.

4.  Key Investor Questions and Answers

1. Impact of Rising Interest Rates
   Investor Morgan Stanley asked how higher rates might affect advertising spend. Pichai responded that “Google Ads’ resilience is rooted in its diversified inventory and AI‑optimized ad delivery, which helps maintain performance even in tighter economic environments.”

2. Waymo’s Regulatory Hurdles
   BlackRock inquired about the potential timeline for Waymo’s commercial launch. The CEO said that while regulatory reviews may extend, Waymo’s engineering teams remain “well‑positioned to navigate the process and bring services to market in 2026.”

3. Data‑Privacy Concerns
   Goldman Sachs raised concerns over the upcoming EU AI regulation. Pichai assured that Alphabet would proactively adapt its AI policies and maintain transparency.

4. Cloud’s Competitive Position
   Citadel Securities questioned how Alphabet plans to keep pace with AWS and Azure. CFO David V. stated that the $8 billion annual investment in AI‑optimized data‑centers will give Cloud a “competitive edge in performance and cost.”

5.  Supporting Documents and Additional Links

During the call, Pichai and V. referenced several publicly available documents:

• The Quarterly Investor Presentation (link: https://abc.xyz/investor/quarterly/2025-q3) – provides visual dashboards and detailed segment analysis.
• The SEC Form 10‑Q for Q3 2025 (link: https://www.sec.gov/ixviewer/ix.html?doc=/Archives/edgar/data/1652044/000165204425000004/goog-20250930x10q.htm) – includes footnotes, risk factors, and a full breakdown of GAAP/non‑GAAP metrics.
• The Annual Climate Report 2025 (link: https://www.alphabet.com/sustainability/climate-report) – expands on the carbon‑neutrality milestones and future commitments.

Alphabet’s investor relations website also hosts an updated earnings video and a Q&A PDF summarizing the call’s key takeaways.

6.  Concluding Thoughts

Alphabet’s Q3 2025 earnings call reinforced the company’s status as a diversified tech behemoth that continues to lead in advertising, cloud computing, and emerging AI ventures. The firm’s guidance points to steady, albeit modest, growth for the remainder of the year, underpinned by strategic investments in data‑center infrastructure, AI development, and sustainability initiatives.

For investors, the call underscores Alphabet’s resilience in the face of macro‑economic headwinds and regulatory scrutiny, while also highlighting potential growth avenues through AI‑driven product innovation and expanded cloud services. As the company charts its course toward a carbon‑negative future and deeper AI integration, stakeholders will be watching closely to see how these ambitions translate into shareholder value in the coming quarters.