Alphabet Inc. Q3 FY2025 earnings call

Sundar Pichai mentioned Alphabet had a terrific quarter with double-digit growth across all major parts. AI is driving real business results, with Gemini models processing 7 billion tokens per minute, Gemini app having over 650 million MAUs. Cloud had accelerating growth with AI revenue as a driver, backlog grew 46% QoQ. YouTube remained #1 in streaming watch time, launched AI-powered features. Waymo aims to open service in London, expand in US cities. Philipp Schindler discussed Google Services performance, AI enhancing Search monetization, YouTube ad growth, and creator tools. Anat Ashkenazi covered Alphabet-level results and segment details.

Google Services revenues increased 14% to $87.1 billion, with Google Search and other advertising revenues up 15% to $56.6 billion, YouTube advertising revenues up 15% to $10.3 billion, network advertising revenues down 3%, and subscriptions, platforms and devices revenues up 21% to $12.9 billion. Google Cloud revenue increased 34% to $15.2 billion, with operating income up 85% to $3.6 billion and backlog at $155 billion. Other Bets revenues were $344 million with an operating loss of $1.4 billion.

Expect FX tailwind to revenues in Q4 but FX volatility may affect. Cloud demand remains high. 2025 CapEx expected $91-93 billion, up from previous estimate, 2026 CapEx to increase. Depreciation to accelerate due to CapEx increase, sales and marketing expenses weighted to end of year.

Q: On agentic e-commerce and Waymo integration; A: Philipp talked about agentic experiences being additive, Sundar mentioned Waymo and Gemini integration.

Q: Drivers of core search strength; A: Philipp discussed AI Overviews and Mode driving query growth, Anat talked about efficiency efforts.

Q: Custom silicon and YouTube subscriptions; A: Sundar on custom silicon demand, Philipp on YouTube's twin engine monetization.

Q: Gemini adoption and search economics; A: Sundar on user engagement, Philipp on AI Overviews monetization.

Q: AI Mode query length and ROIC; A: Philipp on AI Mode testing, Anat on rigorous ROIC evaluation.

Q: Commercial queries and AI Max; A: Philipp and Sundar on AI Max expanding targeting.

Q: Addressable market and AI Mode progression; A: Sundar on search evolution.

Q: Frontier models and cloud deal economics; A: Sundar on model innovation pace and cloud deal momentum