Alphabet posted its first quarter with more than $100 billion in sales. CEO Sundar Pichai told analysts on October 29 that AI drives the growth. The Gemini app now has more than 650 million monthly active users. Queries tripled from the second quarter, Pichai said.
Cloud and AI Drive Revenue Growth
According to PYMNTS, Alphabet’s third-quarter revenue reached $102.3 billion. That marks a 15% increase from a year earlier. Google Cloud revenue climbed 34% to $15.2 billion. The cloud division’s operating income more than doubled to $3.6 billion from $1.9 billion a year ago.
Pichai said first-party models like Gemini process 7 billion tokens per minute through direct API use. Enterprise customers increased by about 34% year over year. The company signed more deals over $1 billion in the third quarter than in the previous two years combined. Cloud backlog grew to $155 billion.
AI Powers Search and YouTube
Revenues from products built on generative AI models grew by 200% year over year. AI Overviews drive meaningful query growth in search, Pichai said. The effect is more pronounced with younger people. Search and its AI experiences send billions of clicks to websites every day.
YouTube advertising revenue rose 15% to $10.3 billion. Direct response advertising fueled the growth. YouTube Shorts now earns more revenue per watch hour than traditional content. Alphabet crossed the 300 million mark in paid subscriptions, led by Google One and YouTube Premium.
Shopping and Services Expand
Services revenue totaled $87 billion for the quarter. That reflects 14% growth tied to search and YouTube. Search and Other revenue climbed 15% to $56.5 billion. Retail and financial services showed the strongest gains. The company expanded try-on capabilities to more clothing items for anyone in the U.S.
Chief Business Officer Philipp Schindler said AI Max helps advertisers discover new customers. The company works on multiple agentic experiences across travel, commerce, and shopping. Technology-related costs reached $14.9 billion, up 8% from a year ago. Alphabet’s stock rose 4% in after-hours trading on October 29.
