Alphabet Inc. (NASDAQ: GOOGL, GOOG) shattered financial records in its fourth-quarter 2025 results, reported on February 4, 2026. In a historic year for the tech giant, annual revenues crossed the $400 billion threshold for the first time, fueled by a resurgence in Search and an explosive 48% growth in Google Cloud.
Q4 & Full Year 2025: Key Financial Comparison
| Metric | Q4 2025 | Full Year 2025 | YoY Change (FY) |
| Revenue | $113.8 Billion | $402.8 Billion | +15% |
| Operating Income | $35.9 Billion | $129.0 Billion | +15% |
| Net Income | $34.5 Billion | $118.4 Billion | +30% (Q4) |
| Operating Margin | 31.6% | 32% | Flat / Steady |
Segment Performance: Cloud and Search Lead the Charge
Google Cloud: The 48% Explosion
The quarter belonged to Google Cloud, which has officially shed its “third-place” status to become the company’s primary structural growth engine.
The Backlog: Cloud backlog skyrocketed 55% quarter-over-quarter to a mind-bending $240 billion.
Search revenue grew 17% to $63.1 billion. CEO Sundar Pichai noted that “AI Overviews” and “AI Mode” are driving an “expansionary moment” for Search, particularly among younger demographics.
YouTube’s annual revenue surpassed $60 billion for the first time. While ad growth was solid (up 9% to $11.4B in Q4), the platform now boasts over 325 million paid subscriptions across YouTube Premium and Google One.
Gemini 3 and the “Apple Effect”
The launch of Gemini 3 in December 2025 has redefined Alphabet’s consumer footprint.
User Growth: The Gemini App now boasts 750 million monthly active users, with engagement per user spiking significantly since the version 3 update.
The iPhone Win: Sundar Pichai highlighted a new collaboration with Apple, positioning Google as the preferred Cloud provider for next-gen foundation models. This puts Gemini technology at the core of Siri and iOS for over 2.5 billion devices.
The “Money Wall”: Analyzing the $185B CapEx
The most scrutinized number in the report was the $185 billion top-end CapEx guidance for 2026, a figure that exceeds the total market cap of 90% of the S&P 500.
Infrastructure Dominance: The spend is focused on securing energy grids and scaling the Ironwood TPU (Alphabet’s internal AI chip), which management claims offers a significant “performance-per-dollar” advantage over commodity GPUs.
The Margin Question: While the spend is historic, Alphabet is funding it entirely through Free Cash Flow, unlike some peers who have turned to debt. However, investors are watching for “depreciation drag” which could compress margins in late 2026.
Management Commentary
CEO Sundar Pichai signaled that the “experimental” phase of AI is officially over.
Sundar Pichai, CEO said, “Overall, we are seeing our AI investments and infrastructure drive revenue and growth across the board. We are moving from providing tasks to running entire ‘digital assembly lines’ for our enterprise partners.”
Anat Ashkenazi, CFO said, “Looking ahead to 2026, we expect a significant increase in CapEx. This is a purposeful investment in a backlog that has outpaced even our own bullish projections.”
Investor Takeaway: The “New Google”
Alphabet has successfully pivoted from a legacy search business to an AI-first conglomerate. With a $240 billion backlog and a dominant position on the iPhone, the company is effectively “taxing” the AI economy. The only risk is the sheer scale of the investment. Wall Street will demand that the $185 billion in hardware translates into a $500 billion revenue year by 2027.
Alphabet ended 2025 with a market capitalization exceeding $4.1 trillion. For investors, the takeaway is clear: Google has successfully defended its Search moat against generative AI competitors while simultaneously building a world-class Cloud business.
The “risk” for 2026 is no longer about demand. It’s about execution. With nearly $180 billion in CapEx on the table, the market will be hyper-focused on whether these massive infrastructure bets can maintain the 30%-plus net income growth Alphabet delivered this quarter.