Google CEO Sundar Pichai gestures to the crowd during Google’s annual I/O developer conference on May 20, 2025 in Mountain View, California.
Camille Cohen | Afp | Getty Images
alphabet proposed revenue and profit figures in its fourth-quarter earnings report on Wednesday and said it expected a significant increase in artificial intelligence spending in 2026.
The stock fell in extended trading.
Here’s how the company compared to estimates from analysts surveyed by LSEG:
- Earnings per share: $2.82 versus estimated $2.63
- Revenue: $113.83 billion versus estimated $111.43 billion
Wall Street also observed several other numbers in the report:
- Google Cloud: According to StreetAccount, $17.66 billion versus $16.18 billion
- YouTube advertising: According to StreetAccount, $11.38 billion versus $11.84 billion
- Traffic acquisition costs: According to StreetAccount, $16.59 billion versus $16.20 billion
Alphabet said it expects capital spending in the range of $175 billion to $185 billion in 2026. The high end of that forecast would be more than double 2025 spending. The company said in October that a “significant increase” in capital expenditure is expected for 2026.
The company’s capital spending will go toward investing in AI computing capacity for Google DeepMind and meeting “significant cloud customer demand, as well as strategic investments in other areas,” Alphabet Chief Financial Officer Anat Ashkenazi said in a call with analysts on Wednesday. She added that it would serve to “improve user experience and increase advertisers’ ROI on Google services.”
The company reported a year-over-year increase in revenue of nearly 18%. Net income was $34.46 billion, up nearly 30% year over year.
Advertising revenue was $82.28 billion, up 13.5% year over year. YouTube ad revenue rose nearly 9% to $11.38 billion, but fell short of analysts’ expectations of $11.84 billion.
Ashkenazi said: “Advertising results were negatively impacted by cutting high spending on the US elections in the fourth quarter of 2024.”
Google Cloud beat Wall Street expectations, posting a nearly 48% year-over-year increase in revenue. Google’s cloud unit houses most of the company’s AI services and products.
That company’s backlog rose 55%, more than doubling year-over-year and reaching $240 billion at the end of the fourth quarter, Ashkenazi said.
Alphabet and Google CEO Sundar Pichai said on Wednesday’s earnings call that its Gemini AI app now has more than 750 million monthly active users, up from 650 million monthly active users last quarter.
“As we scale, we become significantly more efficient,” Pichai said. “Through model optimizations, efficiency and utilization improvements, we reduced Gemini deployment unit costs by 78% in 2025.”
Other Bets, which includes the company’s life sciences unit Verily and self-driving car division Waymo, reported revenue of $370 million in the quarter, down 7.5% from a year ago. Alphabet reported a loss of $3.61 billion for Other Bets, up more than 200% from a year ago.
Waymo had to pay $2.1 billion in stock-based compensation for the quarter educated a new round of financing valued at $16 billion. Most of the burden was reflected in research and development spending, Ashkenazi said.
Alphabet’s self-propelled wing ended 2025 The company has completed 15 million trips in five major U.S. markets, including Austin, Texas, Atlanta, Los Angeles, Phoenix and the San Francisco Bay Area. Waymo began service in Miami in January.
REGARD: Google DeepMind CEO on the state of AI competition, urges the impact of AGI and AI on jobs
