Google Q3 Report: AI Drives Growth Across Search, Cloud, & YouTube via @sejournal, @MattGSouthern
Google reports 15% revenue growth as AI features expand across search and cloud services, driving record quarterly results. The post Google Q3 Report: AI Drives Growth Across Search, Cloud, & YouTube appeared first on Search Engine Journal.
FrankLin
Alphabet Inc. reported its third-quarter earnings, with revenues reaching $88.3 billion, a 15% increase from last year.
The Google parent company’s operating margin expanded to 32% from 27.8% year-over-year, while net income rose 34% to $26.3 billion.
During the earnings call, the company highlighted the growing role of AI across its products and services.
Google Cloud revenue increased 35% to $11.4 billion, while YouTube surpassed $50 billion in combined advertising and subscription revenue over the past four quarters.
Several operational changes occurred during the quarter, including the reorganization of Google’s AI teams and the expansion of AI features across its products.
The company also reported improvements in AI infrastructure efficiency and increased deployment of AI-powered search capabilities.
Highlights
AI
CEO Sundar Pichai emphasized how AI transforms the search experience, telling investors that “new AI features are expanding what people can search for and how they search for it.”
Google’s AI infrastructure investments are yielding efficiency gains. According to Pichai, over a quarter of all new code at Google is now generated by AI and then reviewed by engineers, accelerating development cycles.
Google has reduced AI Overview query costs by 90% over 18 months while doubling the Gemini model size. These improvements extend across seven Google products, each serving over 2 billion monthly users.
Cloud
The Google Cloud division reported operating income of $1.95 billion, marking an increase from $266 million in the same quarter last year.
Company leadership attributed this growth to increased adoption of AI infrastructure and generative AI solutions among enterprise customers.
In an organizational move, Google announced it will transfer its Gemini consumer AI team to Google DeepMind, signaling a deeper integration of AI development across the company.
YouTube
YouTube achieved a notable milestone: its combined advertising and subscription revenues exceeded $50 billion over the past four quarters.
YouTube ads revenue grew to $8.9 billion in Q3, while the broader Google subscriptions, platforms, and devices segment reached $10.7 billion.
Financials
Net income increased 34% to $26.3 billion Operating margin expanded to 32% from 27.8% last year Earnings per share rose 37% to $2.12 Total Google Services revenue grew 13% to $76.5 billionWhat This Means
Google’s Q3 results point to shifts in search that SEO professionals and businesses need to watch.
With AI Overviews now reaching over 1 billion monthly users, we’re seeing changes in search behavior.
According to CEO Sundar Pichai, users are submitting longer and more complex queries, exploring more websites, and increasing their search activity as they become familiar with AI features.
For publishers, the priorities are clear: create content that addresses complex queries and monitor how AI Overviews affect traffic patterns.
We can expect further advancements across services with Google’s heavy investment in AI. The key will be staying agile and continually testing new features as they roll out.
Featured Image: QubixStudio/Shutterstock
