Alphabet (GOOGL) just posted its best annual performance in history as AI becomes a tremendous revenue engine.
In its latest earnings call, CEO Sundar Pichai says Alphabet crossed a major milestone amid AI-driven momentum.
“It was a tremendous quarter for Alphabet. The launch of Gemini 3 was a major milestone, and we have great momentum. Alphabet’s annual revenues exceeded $400 billion for the first time. This quarter, Search continued to accelerate with revenues growing 17%. YouTube’s annual revenues surpassed $60 billion across ads and subscriptions. Cloud significantly accelerated with revenues growing 48% now on an annual run rate of over $70 billion.”
Pichai also notes that demand is already locked in well beyond Q4.
“Backlog grew by 55% quarter over quarter to $240 billion, representing a wide breadth of customers driven by demand for AI products.”
On the consumer side, Pichai points to subscription growth and rapid adoption of Gemini across both individuals and businesses.
“We have over 325 million paid subscriptions across consumer services, strong adoption for Google One and YouTube Premium. In addition, we have sold more than 8 million paid seats of Gemini Enterprise, which we launched just four months ago. And our Gemini app now has over 750 million monthly active users. We are also seeing significantly higher engagement per user, especially since the launch of Gemini 3 in December. Overall, we are seeing our AI investments and infrastructure drive revenue and growth across the board to meet customer demand and capitalize on the growing opportunities ahead of us.”
Pichai’s comments come after the firm’s Q4 results largely beat estimates. Last quarter, Alphabet printed $113.8 billion in revenues versus consensus estimates of $111.4 billion. Adjusted EPS stands at $2.82, above estimates of $2.64.
Meanwhile, operating income is a miss at $35.9 billion versus the forecasted $36.9 billion.
Despite Alphabet’s 2025 performance, GOOGL dropped 1.9% to $333.04 as investors reacted to the firm’s 2026 CapEx guidance of $175 – $185 billion versus the estimated $91.4 billion – $120 billion.
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