Alphabet reported a 14% year-over-year revenue increase to $96.4 billion, driven by strong growth across its business lines, particularly in Search and Google Cloud. Search monetization benefited from AI Overviews, which enhanced query volume by 10%, gaining 100 million monthly users. Google Cloud revenue jumped 32% as demand for Gemini-based tools surged. However, capital expenditures soared to $22.4 billion, causing free cash flow to decrease by 61% to $5.3 billion, with analysts expressing concerns over the implications of rising depreciation and tightened server supply.
Alphabet experienced a strong affirmation of its pivot to AI-first monetization, achieving a revenue increase of 14% year-over-year to $96.4 billion.
AI Overviews and AI Mode boosted search queries by 10% globally, reaching over 100 million monthly users, significantly contributing to revenue growth.
Google Cloud revenue surged 32% due to enterprise demand for Gemini-based tools, with over 450 million monthly active users engaging with Gemini.
Capital expenditures increased sharply to $22.4 billion, resulting in a 61% reduction in free cash flow year-over-year, raising concerns over ballooning depreciation and tight server supply.
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