"Total revenue -- $102.3 billion, up 16% year-over-year or 15% in constant currency, marking Alphabet (NASDAQ:GOOGL)'s first-ever quarter above $100 billion. Operating income -- $31.2 billion, up 9% year-over-year; excluding the $3.5 billion EC fine, operating income rose 22% and operating margin reached 33.9%. Net income -- $35 billion, a 33% increase year-over-year on double-digit growth from all major segments. EPS -- $2.87, increasing 35% year-over-year. Free cash flow -- $24.5 billion in the quarter, with $73.6 billion over the trailing twelve months, "benefited from strong operating cash flow and recent tax changes," partially offset by higher CapEx."
"Operating expenses - Total operating expenses increased 28% to $29.7 billion, driven significantly by a $3.5 billion charge for a European Commission fine and higher R&D expenses. Operating margin impact - Operating margin in Google Services declined year-over-year to 38.5% due to the EC fine and increased technical infrastructure costs. Incremental cost pressure - CFO Ashkenazi stated, "the significant increase in our investments in technical infrastructure will continue to put pressure on the P&L in the form of higher depreciation expenses and related data center operations costs such as energy." Headwinds in advertising growth comparison - Management indicated, "year-over-year comparisons in advertising will be negatively impacted by the strong spend on U.S. elections in the fourth quarter of 2024, particularly on YouTube.""
Alphabet reported $102.3 billion in revenue, a 16% increase year-over-year, marking the first quarter above $100 billion. Operating income reached $31.2 billion, up 9%, and rose 22% excluding the $3.5 billion European Commission fine. Net income was $35 billion, up 33%, and EPS grew 35% to $2.87. Free cash flow totaled $24.5 billion for the quarter and $73.6 billion over the trailing twelve months, partially offset by higher CapEx. Google Services revenue increased 14% to $87.1 billion. Total operating expenses rose 28% to $29.7 billion due to the EC fine and higher R&D and infrastructure costs. Management noted continued pressure from technical infrastructure investments and advertising comparability headwinds from strong 2024 U.S. election spend, particularly on YouTube.
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