Alphabet crushed Wall Street expectations in Q1 2025, and YouTube played a starring role. The video platform pulled in $8.93 billion in advertising revenue — a 10.3% year-over-year jump — helping power Alphabet to $90.23 billion in total revenue and $34.54 billion in net income, up 46% from the same period last year. It’s Alphabet’s most profitable quarter ever.
YouTube’s ad performance wasn’t quite a blowout versus Street estimates (which sat at $8.97B), but the double-digit growth on top of an already massive base is telling. The platform’s momentum — especially after posting a record-breaking $10B quarter in Q4 2024 thanks to election-fueled ad spend — shows YouTube’s growing resilience, even as broader digital advertising faces headwinds.
Core Businesses Firing on All Cylinders
- Google Search and YouTube remained the key pillars of Alphabet’s advertising business. Together with the Google Network, total ad revenue reached $ 61.66 billion.
- Google Cloud grew 28% YoY to $12.3B and turned in $900 million in operating income — a meaningful swing from a $191 million loss a year ago.
- Subscriptions (YouTube Premium, YouTube TV, and Google One) helped Alphabet surpass 270 million paid subscribers.
The ongoing rollout of AI products — especially Gemini 2.5 and AI Overviews, which now serves 1.5 billion users monthly — contributed to Alphabet’s Search engagement and revenue lift. CEO Sundar Pichai positioned AI as the cornerstone of Alphabet’s product evolution, calling it an “extraordinary foundation for future innovation.”
YouTube: A Dominant Force in TV and Digital Ad Markets
According to Nielsen, YouTube accounted for 12% of all TV usage in March 2025 — more than any individual network or portfolio, including Disney’s entire TV footprint. It’s no longer just digital; YouTube is an undeniable player in the television ecosystem.
Unlike many traditional TV networks still facing scatter market volatility and flat-to-declining ad revenues, YouTube continues to benefit from its global reach, maturing monetization tools, and investment in AI-driven ad performance.
CFO Ruth Porat credited the YouTube revenue growth to “strength in both brand and direct response advertising” while also signaling that the platform’s growing suite of AI tools is boosting both relevance and advertiser ROI.
Alphabet Sends a Message with Dividend, Buyback
Alphabet declared its first-ever dividend — $0.20 per share, payable June 17 — and authorized a $70 billion stock repurchase. It’s a move designed to signal long-term confidence in the company’s financial durability and cash flow.
But Legal Headwinds Remain
Despite a record quarter, Alphabet still faces regulatory pressure. The company is appealing recent U.S. rulings that it held illegal monopolies in both internet search and ad tech. Remedies could take months, if not years, to play out — but the possibility of forced divestitures, like Chrome, looms large.
