Alphabet (NASDAQ: $GOOG) is a multinational tech company that is behind many well-known brands like Google and Gmail. It focuses on various tech areas like internet services, cloud computing, and hardware. On Thursday, April 254, 2025, after markets closed, Alphabet released its Q1 fiscal 2025 results. Here is a deep dive into those results.
Alphabet Q1 Results
For the first quarter of fiscal 2025, Alphabet reported a 12% YoY increase in revenue to $90.2 billion, beating estimates of $89.2 billion. It reported an EPS of $2.81 on a $34.5 billion net income, beating forecasts of $2.01 on a $24.8 billion net income.
Revenue Sources
Google Search & other remains the biggest source of revenue for the tech giant, bringing in $50.70 billion in revenue, compared to $46.16 billion last year. Overall, Google Services brought in $77.26 billion in revenue, compared to $70.40 billion last year. Google Cloud saw a significant 28% jump in revenue to 12.26 billion, compared to $9.57 billion last year.
The company reported a traffic acquisition cost of $13.75 billion in Q125, compared to $12.94 billion last year. It ended the quarter with 185,719 employees, compared to 180,895 last year. Alphabet reported 30.61 billion in income from operations at the end of the quarter, compared to $25.47 billion last year. It reported $18.95 billion in free cash for Q1 and a TTM free cash flow of $74.88 billion.
Dividend And Share Buyback
Alphabet announced dividend payouts of $2.4 billion for the first quarter, at $0.21 per share, a 5% increase from the previous $0.20 dividend payout. It bought back $15.1 billion worth of shares in Q1, and authorized a buyback of an additional $70 billion of its Class A and Class C shares.
Earnings Call Highlights
During the earnings call, Alphabet CFO, Anat Ashkenazi, stated that the company expects a CapEx of around $75 billion in full-year 2025. This spending may fluctuate quarter to quarter due to changes in the timing of deliveries and construction schedules.
Market Performance
Following the positive Q1 results and $70 billion share buyback announcement, GOOG stock soared 2.92% in the early morning trading session to $166.18 as of 9:57 AM EDT on April 25, 2025, adding an additional $58.72 billion to the market cap to $2.011 trillion.
Year to date, GOOG shares are down 12.77%, while over the past six months, the stock is down 0.52%. Meanwhile, the stock has gained 5.18% in the past 12 months.
The is now just below its 50-day moving average of $166.66, and below its 200-day moving average of $174.08. IT has a forward P/E ratio of 18.42, which is much lower than that of peers AMZN, at 28.25, and MSFT at 25.84.
Analysts are optimistic about the future of GOOG, giving it an overall strong buy rating. They forecast an average price of $204.33, which is a 24.09% upside based on the most recent price. The analysts provide a wide range of price targets, with a high of $234 and a low of $173.
Is GOOG A Great Buy Right Now?
While Alphabet was a bit behind when it came to launching mass AI products, it has quickly caught up, and with its economies of scale, could soon compete with ChatGPT in the AI space. It is also worth noting that the stock has the lowest valuation of the magnificent seven stocks in terms of the forward P/E ratio.
The company is currently facing an antitrust lawsuit. However, new platforms such as TikTok and ChatGPT, which have experienced a massive surge in user base, might make the lawsuit moot. Consequently, adding GOOG to your portfolio could potentially lead to gains in the medium and long term.
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