Alphabet Inc. Q4 FY2025 earnings call

AI Progress - Unrivaled infrastructure with various compute options, including NVIDIA GPUs and own TPUs. Acquired Intersect for data center infrastructure. Lowered Gemini serving unit costs by 78%. - World-class AI research with extensive model portfolio, Gemini 3 Pro's fast adoption, Google Anti Gravity platform with over 1.5M weekly users. - Bringing AI to products: Launched personal intelligence in search and Gemini app, new features in Gmail and Chrome, Project Genie, Universal Commerce Protocol. - Android to Pixel: Partners showcasing Gemini, upcoming Pixel 10a. ### Search - More usage than ever, over 250 product launches in Q4, Gemini 3 integrated, AI mode queries doubled in US, longer complex sessions, non-text queries increasing. ### Google Cloud - Revenue up 48%, winning new customers faster, larger deals, existing customers spending more, 75% of customers using vertical AI, generative AI models driving growth, over 120,000 enterprises using Gemini. ### YouTube - Number one streamer in US living room, strong subscription growth, YouTube Music Premium, new TV plans, podcast viewership up 75%, AI tools used by over 1M channels daily. ### Waymo - Raised largest investment round, over 20M autonomous trips, 400,000+ rides weekly, expanded to Miami and plans to expand globally.

Google services revenues increased 14% to $95.9 billion. Google Search and other advertising revenues were $63.1 billion, up 17%. YouTube advertising revenues were $11.4 billion, up 9%. Subscription, platforms, and devices revenues were $13.6 billion, up 17%. Google Cloud revenue was $17.7 billion, up 48%, with operating income $5.3 billion and operating margin 30.1%. Backlog was $240 billion. Other Bets had revenues $370 million and operating loss $3.6 billion.

CapEx - 2026 CapEx expected $175 to $185 billion. ### Revenues - FX tailwind in Q1 for consolidated revenues. Google services growth driven by user experience and advertiser ROI. Google Cloud expects strong growth despite supply constraints. ### Depreciation - Depreciation to accelerate in 2026 due to increased CapEx.

Risks - Supply chain constraints affecting compute capacity. - Exchange rate volatility impacting Q1 revenues. - Intense competition in the AI space.

Q: Brian Nowak asked about agentic commerce progress in 2025 and YouTube's long-term vision for Genie integration.

A: Sundar Pichai said 2025 laid foundation for agentic commerce with Universal Commerce Protocol, and YouTube will incorporate Genie tools with creators at center.

Q: Eric Sheridan inquired about compute capacity gap closure and operating efficiencies.

A: Sundar Pichai noted planning for long term, Anat Ashkenazi mentioned ongoing efficiency efforts across the business.

Q: Doug Anmuth asked about maintaining Gemini's position and TPUs outside Google Cloud.

A: Sundar Pichai said relentless innovation will maintain Gemini's position, TPUs are part of Google Cloud's attractive accelerators.

Q: Mark Mahaney questioned YouTube ad revenue growth and impact on SaaS companies.

A: Philip Schindler said YouTube ads growth driven by direct response, and Sundar Pichai noted Gemini helps SaaS companies in workflows.

Q: Mark Shmulik asked about investment framework and what keeps them up at night.

A: Anat Ashkenazi discussed investment framework, and Sundar Pichai cited capacity and supply chain constraints as concerns.

Q: Michael Nathanson asked about Universal Commerce Protocol and CapEx breakdown.

A: Sundar Pichai explained protocol's role in commerce, and Anat Ashkenazi broke down CapEx into servers and long-term assets.

Q: Ross Sandler asked about Gemini app usage and measurement.

A: Sundar Pichai said Gemini app had strong growth in MAUs and engagement.

Q: Ken Gawrelski asked about search monetization and Apple partnership.

A: Philip Schindler talked about search monetization through AI improvements and partnerships.

Q: Justin Post asked about Gemini app cannibalization and monetization.

A: Sundar Pichai said no cannibalization as it creates expansionary moment, and monetization is in early stages with agentic ads potential.