--- title: "Google (Minutes): It's too early to call the second quarter performance" description: "Below is the Minutes of Google's FY25 Q1 earnings call. For the Quick Interpretation of the earnings report, please refer to "Google: Can the Ad King Remain Steady Amid Endless Tariff Wars?" 1" type: "topic" locale: "en" url: "https://longbridge.com/en/topics/29143524.md" published_at: "2025-04-25T03:45:21.000Z" author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # Google (Minutes): It's too early to call the second quarter performance **Below is the earnings call minutes for** $Alphabet(GOOGL.US) $Alphabet - C(GOOG.US) **FY25 Q1. For earnings analysis, please refer to《**[**Google: Can the Ad King Stay Steady Amid Tariff Wars?**](https://longportapp.cn/zh-CN/topics/29139969)**》** **I. Key Earnings Highlights** ![Automatically generated table description](https://pub.pbkrs.com/uploads/2025/fe8ecbcad8307ee1e3539d0557b56fb2?x-oss-process=style/lg) **1\. Overall Performance:** a. Revenue: Consolidated revenue reached $90.2B, up 12% YoY (14% in constant currency). Search ads, YouTube ads, subscriptions/platforms/devices, and Google Cloud all delivered double-digit growth. b. Costs: Total cost of revenue was $36.4B (+8% YoY). Traffic acquisition costs rose 6% to $13.7B; other revenue costs grew 9% to $22.6B, mainly due to higher YouTube content acquisition costs and increased depreciation. c. Expenses: Total operating expenses grew 9% to $23.3B. R&D increased 14% (driven by compensation & depreciation), **while sales & marketing fell 4% (lower compensation)**, and G&A rose 17% (legal matters). d. Profits: Operating income jumped 20% to $31B (margin: 33.9%); net income surged 46% to $34.5B with EPS up 49% to $2.81. e. Cash Flow: Q1 free cash flow was $19B ($74.9B LTM); cash + marketable securities totaled $95B at quarter-end. **2\. Segment Breakdown:** a. Google Services: \- Revenue: +10% to $77.3B, driven by Search ads, YouTube ads, and subscriptions. Search & other ads revenue grew 10% to $50.7B, led by financial services (insurance) and retail; YouTube ads rose 10% to $8.9B (direct response ads outperformed); Network ads fell 2% to $7.3B; subscriptions/platforms/devices grew 19% to $10.4B (YouTube subs + Google One). \- Profits: Operating income +17% to $32.7B (margin: 42.3%). b. Google Cloud: \- Revenue: +28% to $12.3B, fueled by GCP core + AI products; Workspace growth came from higher ARPU. \- Profits: Operating income hit $2.2B (margin: 17.8%). Scaling efficiency offsets cost growth (especially depreciation). c. Other Bets: Revenue fell to $450M with $1.2B operating loss (no milestone payment vs. Q1 2024). 3\. CapEx: Q1 capital expenditures were $17.2B (mainly servers + data centers) to support Google Services, Cloud, and DeepMind. 4\. Shareholder Returns: $15.1B stock buybacks + $2.4B dividends. Board approved 5% dividend hike and $70B buyback authorization. **5\. Q2 2025 Outlook:** a. Revenue: Google Services ads face tough comps in financial services; Cloud growth depends on capacity deployment (**significant expansion expected by late 2025**). b. Investments: **Full-year CapEx ~$75B** with quarterly volatility. Rising depreciation from prior investments will accelerate in 2025; headcount growth in key areas; Q1 stock comps atypically low. **II. Earnings Call Details** **2.1 Management Highlights** 1\. Overall: **Search** delivered double-digit growth with AI Overviews reaching 1.5B MAUs; **Subscriptions** surpassed 270M (YouTube + Google One); **Cloud** showcased AI leadership at Next ’25 (Gemini 2.5 hailed as industry-leading). 2\. AI Infrastructure: Google’s 2M+ fiber miles + 33 subsea cables underpin its TPU/GPU-rich network. **7th-gen Ironwood TPUs deliver 10x compute vs. DPUs at 2x efficiency**. Partnered with NVIDIA for B200/Blackwell GPUs + upcoming Vera Rubin. 3\. Models: Gemini 2.5 Pro tops benchmarks; AI Studio users +200% YTD. Imagen 3/Veo 2 boost creativity; open-weight Gema 3 downloaded 140M+ times. Gemini robots + AlphaFold serve 2.5M researchers. **4\. Segment Spotlights:** **a. Search:** AI Overviews now in 140 countries (15+ languages). Multimodal searches (Circle to Search) grew 40% QoQ. **b. Ads:** AI-powered PMAX drove 2.7x conversions for Royal Canin (-70% CAC). **c. YouTube:** 20th anniversary; Shorts views +20% QoQ; Premium subs hit 125M globally. **d. Waymo:** Weekly rides +5x YoY to 250K; expanding to Austin/Atlanta. **2.2 Q&A** **Q: Ad verticals showing weakness?** A: Financials led Q1 strength; APAC retail faces slight headwinds from duty-free policy changes. **Q: Commercial query growth drivers?** A: AI Overviews’ record expansion boosted satisfaction; more products coming. **Q: AI Overviews monetization?** A: Ads below Overviews maintain stable RPMs. **Q: Cost restructuring levers?** A: Depreciation pressure rising (+31% YoY), but AI-driven efficiency gains continue. **Q: Gemini differentiation?** A: Search integration (2x query length) + Project Astra momentum. **Q: Flexible vs. fixed investments?** A: $75B CapEx locked in; Cloud demand outstrips supply. **Q: YouTube brand ads?** A: Coachella/March Madness drove growth; financials/retail outperformed. **Q: Internal AI adoption?** A: 30%+ code submissions use AI;客服 teams lead deployment. **Q: AI mode user behavior?** A: Longer, multi-turn queries (e.g., trip planning). **Q: Margin sustainability?** A: Depreciation headwinds mounting but offset by mix shift (higher-margin Search). **Q: Waymo model?** A: Uber partnership scaling; exploring OEM deals. **Q: Multiple AI search UIs?** A: Gemini for coding; Overviews for mass market. **Q: Gross margin drivers?** A: Favorable revenue mix (less Network ads). **Q: YouTube direct ads?** A: AI tools + Shorts monetization gap closing. **Disclosures:** [**Dolphin Research Disclaimer**](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [GOOGL.US - Alphabet](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOG.US - Alphabet - C](https://longbridge.com/en/quote/GOOG.US.md) --- > **Disclaimer**: This article is for reference only and does not constitute any investment advice.