Google reported $66.9 billion in ad revenue for the first quarter of the year, up 8.5% from Q1 2024. Segments like Search and YouTube, continue to be central pillars of its advertising business, according to Alphabet’s Q1 2025 earnings call. 

Google’s Search sees steady Q1 growth

Google’s “Search and Other” brought in $50.7 billion, nearly 10% higher than last year's quarter. Google’s CEO, Sundar Pichai credited the growth to strong user engagement and new features like AI Overviews, which Google says now reach over 1.5 billion users monthly. “In Search, we saw continued double-digit revenue growth,” Pichai wrote.

AI Overviews, which display short summaries directly in search results, have become central to how Google delivers information. The company has since rolled out the feature to more countries and languages globally.

Google is also testing AI Mode—a more advanced search experience that can handle multi-step queries. These AI updates could reshape how ads are served alongside results, and Google is already hinting at bringing ads to AI Mode.

YouTube advertising grows but still misses analyst expectations

YouTube’s ad business continues to grow steadily. However, it fell short of analyst expectations. The video platform generated $8.93 billion in ad revenue for the quarter, compared to $8.0 billion in Q1 2024. Analysts had expected $8.97 billion, according to StreetAccount.

The figure doesn’t include revenue from YouTube’s subscription products like Premium or YouTube TV, which Alphabet still doesn’t break out separately. Still, YouTube’s ad revenue alone posted a strong 10.3% year-over-year gain.

YouTube also appears to be leaning into TV as its primary screen in the U.S. The company recently shared that TV has become the most-used device for watching YouTube content in the country. To tap into that growing viewership, it’s launching new tools aimed at advertisers, including a Promote button to run ads in Shorts. The platform is also testing AI Overviews in search result pages. 

YouTube Premium and Music reportedly hit 125 million subscribers globally, showing growth in user willingness to pay for ad-free music content. It has expanded its Premium Lite option in the U.S.

Alphabet’s overall revenue beat expectations

Alphabet’s overall revenue for Q1 2025 hit $90.2 billion, up 12% from the year before beating Wall Street’s forecast of $89.12 billion. Net income jumped 46% year-over-year to $23.66 billion, while earnings per share rose 49% to $2.81.

Google’s cloud business brought in $12.26 billion, just under analyst expectations of $12.27 billion. Despite the slight miss, it was still a 28% year-over-year increase, with improved profit margins now at 17.8%, compared to 9.4% a year ago.

Despite this strong growth, Google faces legal challenges that could impact its advertising and browser businesses. The company is defending an antitrust trial that revealed it’s paying Samsung a significant amount to preinstall Gemini AI on its devices. The case follows a U.S. federal judge's ruling that Google illegally monopolized the search and ad-tech markets.

If found guilty of monopolistic practices, Google could be forced to divest parts of its business, such as Chrome. OpenAI has reportedly expressed interest in acquiring it if that happens.

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