Alphabet Q1 results: Profit surges on AI, Cloud business, despite legal challenges

Alphabet, Google's parent company, reported a significant increase in profit on Thursday. The company's net income for the first quarter stood at $34.54 billion, up from $23.66 billion last year. Much of the profit boost, however, came from equity investments rather than core business activities.

Revenue for the quarter came in at $90.23 billion, up 12% from a year ago, slightly surpassing analysts' expectations of $89.15 billion. Operational income grew 20%, also exceeding forecasts.

Commenting on the performance, Sundar Pichai, Alphabet's CEO, said, “We’re pleased with our strong results this quarter. We continued to see healthy growth and momentum across the business, including AI powering new features.”

Q1 updates

Gemini: “Our differentiated, full stack approach to AI continues to be central to our growth,” said Pichai, in a post on X,

He revealed that the number of active users of AI Studio and the Gemini API had increased by over 200% since the start of the year, thanks to the launch of Gemini 2.5 Pro. Pichai added that Gemini has now been integrated into all 15 of Google's major products, each with over 500 million users. AI overviews in Search have also reached 1.5 billion monthly users, he noted.

Additionally, the Alphabet CEO announced that Gemini Live camera and screen sharing features are being rolled out to all Android devices, including the Pixel and Samsung S25.

Enterprise AI: “Our AI leadership was on display at @GoogleCloud Next, where we launched Ironwood, our most powerful TPU yet — 10X compute boost, optimised for inference at scale. And we’re first to bring Nvidia’s next-gen Blackwell GPUs to customers,” said Pichai.

YouTube: He noted that YouTube, which celebrated its 20th anniversary this week, has been the number one streaming platform on US TVs for two years.It now has over 125 million Music & Premium subscribers, along with more than 1 billion monthly podcast users.

Pichai added that YouTube, along with Google One, is a key driver of paid subscriptions, which have now surpassed 270 million.

Waymo: Autonomous driving cab service Waymo has now expanded significantly, providing over 250,000 paid rides each week, which is five times the number from a year ago, Pichai said.

While Alphabet's results were strong, the company faced challenges in early 2025, with shares down nearly 25% from their February peak. One reason for this drop was the economic disruption caused by President Donald Trump’s trade tariffs.

Google is also grappling with the rapid evolution of AI in search, which has brought in new competitors such as OpenAI and Perplexity.

Additionally, Google is also facing several antitrust legal battles. In August, a US federal judge ruled that the company has an illegal monopoly in online search and ordered it to sell Chrome. Legal proceedings around this decision are ongoing.

Earlier this month, another federal judge ruled that Google has a monopoly in online advertising technology.

Google remains determined to fight these cases, but an unfavourable outcome could potentially result in the company being broken up, significantly limiting its influence.