No. of Recommendations: 7
Alphabet Announces First Quarter 2025 Results
MOUNTAIN VIEW, Calif. – April 24, 2025 – Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced financial results for the quarter ended March 31, 2025.
Consolidated Alphabet revenues in Q1 2025 increased 12%, or 14% in constant currency, year over year to $90.2 billion reflecting robust momentum across the business, with Google Search & other, YouTube ads, Google subscriptions, platforms, and devices, and Google Cloud each delivering double-digit growth rates.
Google Services revenues increased 10% to $77.3 billion, reflecting strong performance across Google Search & other, Google subscriptions, platforms, and devices, and YouTube ads.
Google Cloud revenues increased 28% to $12.3 billion, led by growth in Google Cloud Platform (GCP) across core GCP products, AI Infrastructure, and Generative AI Solutions.
Total operating income increased 20% and operating margin expanded by 2 percentage points to 34%.
Net income increased 46% and EPS increased 49% to $2.81.
The company announced a 5% increase to the dividend, resulting in a quarterly cash dividend of $0.21.Board approves authorizes an additional $70 Million in share repurchases.
https://www.abc.xyz/assets/34/fa/ee06f3de4338b99ac...
No. of Recommendations: 15
As a long-time shareholder in Alphabet, I am always more than a little impressed after I listen to their quarterly conference calls ;-) Here is my summary of the Q1 25 results:
Alphabet-GOOGL reported impressive first-quarter results, showcasing robust growth across its diverse business segments. Revenues rose 12% to $90.2 billion, marking a significant increase. Net income and earnings per share saw even more substantial jumps, climbing 46% to $34.5 billion and 49% to $2.81, respectively. This strong performance was fueled by double-digit growth in key areas: Google Search, YouTube ads, Google subscriptions, platforms and devices, and Google Cloud. Specifically, Google Services revenue rose by 10% to $77.3 billion, while Google Cloud demonstrated exceptional growth of 28%, reaching $12.3 billion. The company also demonstrated improved profitability, with total operating income increasing by 20% to $30.6 billion. This resulted in an expanded operating margin of 34%, up from 32%, driven by healthy revenue growth and a moderation in compensation expenses. Notably, other income of $11.2 billion included a substantial $8.0 billion unrealized gain from an investment in a private company. A key highlight of the quarter was the rollout of Gemini 2.5, Alphabet's most advanced AI model to date. The company emphasized its "breakthrough performance" and its potential as an "extraordinary" foundation for future innovation. Google Search continued its strong growth, benefiting from increased user engagement with AI Overviews, now utilized by 1.5 billion people monthly. The Search platform sees over two billion daily users and processes more than five trillion searches annually. AI Overviews, which leads to more detailed searches, is currently available in 15 languages across 140 countries. Google Workspace is also seeing significant AI adoption, delivering over 2.0 billion AI assistants monthly, aiding users in tasks like summarizing Gmail and refining documents. The company's paid subscriptions, driven by YouTube and Google One, have surpassed 270 million. YouTube celebrated its 20th anniversary, boasting over 20 billion videos and more than 20 million daily uploads. Alphabet expressed satisfaction with the progress of Waymo, its autonomous car service, which is slated to expand to the Washington DC area in 2026. This past quarter saw Waymo launch a paid service in Silicon Valley through a partnership with Uber. To meet the strong and growing demand for AI infrastructure, which continues to exceed capacity, Alphabet increased its capital expenditures by 43% to $17.2 billion during the quarter. These investments are primarily directed towards datacenters and servers. The company reaffirmed its plan to invest $75 billion in capital expenditures for the full year, recognizing the significant opportunities ahead. Alphabet's strong collaboration with Nvidia is seen as a crucial advantage in addressing its capacity needs. Operationally, Alphabet generated strong cash flow, with cash flow from operations jumping 25% to $36.2 billion and free cash flow increasing by 13% to $18.5 billion. During the quarter, the company returned capital to shareholders through $2.4 billion in dividends and $15.1 billion in share repurchases. Alphabet's balance sheet remains robust, with over $146 billion in cash and investments, $10.9 billion in long-term debt, and $345.3 billion in shareholders' equity. This financial strength allowed the Board to announce a 5% increase in the dividend and a new $70 billion share repurchase program. While acknowledging the current macroeconomic environment, Alphabet highlighted its extensive experience in navigating challenging times and supporting its customers.
No. of Recommendations: 7
Here are some numbers on a valuation model I sometimes use
Actual Model
EPS $2.81 $2.06
EPS (TTM) $8.22 $8.97
Revenue $90.2B $87.9B
Revenue (TTM) $360.0B $357.0B
Stock Price $163 $170 ($163-$176)
Stock Price Forecasts
2025-Q2 $180-$213 ($196)
2025-Q3 $189-$214 ($198)
2025-Q4 $198-$219 ($202)
2026-Q1 $202-$223 ($209)
Note: The volatile EPS number creates more variability in the forecast for sure, but I am pretty confident that $200 share is "fair value" that we would see in the next 12 months (based on a forecast of $392B in revenue and $9.77 in earnings per share.
tecmo
...
