Alphabet, the parent company of Google, made headlines on Thursday, April 24, 2025, as it reported first-quarter earnings that exceeded expectations, sending its stock soaring in after-hours trading. The tech giant's results highlighted strong growth in its core advertising business and cloud computing, despite facing economic headwinds.
For the quarter ending March 31, 2025, Alphabet announced earnings of $2.81 per share, a remarkable 48% increase compared to the previous year. Analysts had projected earnings of only $2.01 per share, making this significant beat a key talking point among investors and analysts alike. The company's adjusted operating margin also impressed, coming in at 40%, surpassing estimates of 38%.
In terms of revenue, Alphabet reported gross earnings of $90.23 billion, a 12% increase year-over-year, which also topped analyst expectations of $89.12 billion. Much of this growth was driven by Google’s core advertising business, which generated $66.89 billion, reflecting an 8.5% increase from the previous year. This figure, while lower than the 10.6% growth seen in the prior quarter, exceeded Wall Street's forecast of 7.7% growth.
Moreover, the company’s cloud computing division also showed robust performance, with revenue rising 28% to $12.26 billion, just shy of the expected $12.27 billion. This growth reinforces Google Cloud’s position as a vital component of Alphabet's overall strategy.
However, not all news was positive for the tech giant. Just days before the earnings report, a federal judge ruled that Google holds an illegal monopoly in the online advertising space, a ruling that could compel the company to divest significant portions of its ad technology business. This follows a similar antitrust setback from the previous year regarding the company's dominance in search.
In response to the strong earnings, Alphabet's board of directors authorized a substantial $70 billion stock repurchase program, mirroring the initiative from 2024. The company repurchased $15.07 billion of its own stock during the first quarter, reflecting its commitment to enhancing shareholder value. This move, coupled with a 5% increase in dividends, signals Alphabet's confidence in its financial health and future growth potential.
Following the earnings announcement, Alphabet's stock jumped more than 3% to $165.31 in extended trading, adding approximately $75 billion to the company's market capitalization. This surge comes after the stock had retreated by 17% earlier in 2025, indicating a strong rebound in investor sentiment.
As Alphabet continues to navigate the complexities of the tech landscape, its ability to adapt and innovate remains critical. The company is increasingly focusing on artificial intelligence and cloud services, areas that are expected to drive future growth.
Despite the challenges posed by regulatory scrutiny, Alphabet's latest earnings report showcases its resilience and capacity to thrive in a competitive environment. Analysts will be closely watching how the company addresses the antitrust issues while leveraging its strengths in advertising and cloud computing to maintain its market position.
In summary, Alphabet’s first-quarter results not only surpassed expectations but also underscored the strength of its core businesses. With a significant stock buyback and a solid dividend increase, the company is poised to reassure investors of its long-term viability despite external pressures.
