25 April 2025
If you are covering Alphabet’s latest results, please see the following comment from Ben Barringer, global technology analyst at Quilter Cheviot:
Alphabet’s results were better than feared, showing resilience in its core advertising business despite a complex macro environment.
Search advertising remains a robust and defensive revenue stream, with Search revenue rising 10%, a solid 1% ahead of expectations which is driven by strong engagement and AI integration across key sectors like insurance, health, and retail. The figures reinforce the notion that search is still an essential part of the digital marketing diet for many firms and isn't the first to be cut in the face of economic pressures stemming from tariff risks.
YouTube, now two decades old, continues to grow steadily, with revenues up 10% year-on-year. It’s still a giant in digital video, with 20 million video uploads weekly and over 20 billion videos on the platform, underscoring its staying power even as new platforms emerge.
Its Cloud business was the slight blemish, coming in just shy of consensus at 28% growth versus the 29% expected. However, the business posted significant margin improvements, showing Alphabet’s agility in managing costs and scaling efficiently.
Capex was a major theme and was held at $75 billion, up from $55 billion last year. That’s a clear sign of Alphabet’s commitment to AI infrastructure, even as it acknowledges that demand is outstripping supply. They’re cost conscious and laser-focused on ROI, but the reality is that staying competitive in AI requires serious investment.
Waymo, Alphabet’s autonomous driving arm, continues to make steady progress with 250 million weekly rides and new rollouts in key US cities like Washington DC, Miami, and Atlanta. While it’s still early days, these are promising signs.
The company didn’t provide forward guidance, and there are still some geopolitical clouds on the horizon, particularly around potential tariffs, and the impact of Chinese advertisers such as Shein and Temu, reducing investment. But so far, Alphabet looks to be weathering the storm.
Looking ahead to Meta’s results on April 30th, this should provide more guidance as to what it thinks the future holds given the economic backdrop but generally for Alphabet a reasonable set of results at this juncture.
