TL;DR — Alphabet reported Q4 2025 on February 4, 2026. This preview asked whether revenue would hold above $100 billion and whether Google Cloud’s margin could approach 30%. Both happened: revenue reached $113.8 billion and Cloud earned a 30.1% margin, but 2026 capex guidance of $175 to $185 billion became the story.
Alphabet reports its fourth-quarter and full-year 2025 results on February 4, 2026, after a year in which GOOGL rose about 65%. The focus is no longer AI potential but AI execution. The company already posted its first $100 billion quarter in Q3, so the benchmark has changed: the question now is whether that level is a floor, and whether Google Cloud can turn its growth into Alphabet-grade margins.
The $100 billion line is now a floor, not a finish line
Third-quarter revenue came in at $102.3 billion, up 16% year over year. Google Search & other grew about 15% to $56.6 billion, which undercut the argument that chatbots were draining search demand. Google Cloud grew 34% to $15.2 billion.
Profitability held up too. Q3 operating margin was 30.5% as reported and 33.9% excluding a $3.5 billion European Commission fine, and diluted EPS rose 35% to $2.87. The base Alphabet carries into Q4 is strong, which raises the bar rather than lowering it.
Seasonality favors the fourth quarter, when advertising budgets peak. The comparison base is $96.5 billion from Q4 2024, so mid-teens growth would put revenue well above $100 billion. Going into the print, Wall Street consensus sat near $111 billion in revenue and roughly $2.63 to $2.64 in earnings per share, depending on the data provider.
Clearing $100 billion again is therefore table stakes. The more informative signal is whether Search growth holds or accelerates from Q3’s pace. A slowdown would revive the cannibalization narrative; stability would suggest AI features are expanding the business rather than replacing it.
Google Cloud has to show its margin can reach 30%
Google Cloud has been profitable on a full-year basis since 2023, when it earned $1.7 billion of operating income. Its margin then climbed from 17.5% in Q4 2024 to 23.7% in Q3 2025. Investors want proof that the path toward 30% is structural, not a one-quarter effect.
The risk is cost. Cloud now sells large amounts of AI infrastructure, and Alphabet’s Q3 10-Q names rising usage costs for technical infrastructure as a partial offset to Cloud’s profit growth. If TPU and GPU clusters are eating the incremental revenue, Cloud margin will stall or dip even as sales accelerate. We lay out the longer-term case in our Google Cloud analysis.
Capex is the other half of the Cloud equation. Alphabet spent $24.0 billion on property and equipment in Q3 alone and raised its 2025 range to $91 billion to $93 billion. The first look at 2026 spending will show how much margin pressure management is willing to accept to meet Cloud demand.
The preview tracked four data points:
- Total revenue versus the $100 billion line and the roughly $111 billion consensus.
- Google Cloud operating margin versus 23.7% in Q3 2025.
- Search & other growth versus about 15% in Q3.
- 2026 capital expenditure guidance versus 2025’s $91 billion to $93 billion range.
Crossing $100 billion once was a milestone. Staying above it while Cloud margins expand is the benchmark.
What Actually Happened
Update, added after the February 4, 2026 release. Alphabet beat on every line the preview tracked. Revenue rose 18% to $113.8 billion, and full-year revenue topped $400 billion for the first time at $402.8 billion. Search & other accelerated to 17% growth at $63.1 billion, while YouTube ads grew 9% to $11.4 billion.
Google Cloud was the standout. Revenue grew 48% to $17.7 billion and segment operating income more than doubled to $5.3 billion, a 30.1% margin, meeting the 30% threshold in a single jump. Cloud backlog reached $240 billion, up 55% from the prior quarter.
Usage metrics backed up the numbers. Sundar Pichai said the Gemini app passed 750 million monthly active users, first-party models were processing more than 10 billion tokens per minute through direct API use, and Alphabet had over 325 million paid subscriptions across its consumer services.
Consolidated operating margin was 31.6%, including a $2.1 billion Waymo compensation charge. Net income rose 30% to $34.5 billion and diluted EPS was $2.82, well above consensus.
One quieter line deserved attention. Share repurchases fell to $5.5 billion in Q4 2025 from $15.6 billion a year earlier, even as full-year free cash flow reached $73.3 billion. The board kept the quarterly dividend at $0.21 per share. Cash was already being redirected toward infrastructure.
The capex number reset the debate. Management guided 2026 capital expenditures to $175 billion to $185 billion, roughly double the $91.4 billion spent in 2025, and the CFO warned of higher depreciation. GOOGL closed at $333.04 on February 4 and $331.25 the next day, a muted reaction to a strong quarter. We examine how that spending converts into revenue in our RPO and capex bridge.
What to watch next: whether Cloud holds a margin of 30% or better as capacity comes online, how fast depreciation grows as the 2026 build-out hits the income statement, and whether free cash flow can keep funding buybacks and dividends at this spending level. The $100 billion quarter is settled. The next benchmark is whether returns on a $175 billion-plus capex year show up in Cloud profits rather than only in the backlog.
Sources and disclosure: Alphabet’s Q4 2025 earnings release (Exhibit 99.1), Q3 2025 earnings release, Q3 2025 Form 10-Q and 2025 Form 10-K on SEC EDGAR; Alphabet Investor Relations; Sundar Pichai’s Q4 2025 earnings remarks. Price data from Nasdaq closing prices. The author has a long position in Alphabet (GOOGL/GOOG). Nothing in this article is investment advice, and our full disclosure is on the About Third Pole Markets page.
