Alphabet Google Ad Revenue Up 13% & Microsoft Bing Ads Revenue Up 16%

10/29/25
Source: Search Engine Roundtable by barry@rustybrick.com (Barry Schwartz). Read the original article

TL;DR Summary of Google and Microsoft Q3 2025 and Q1 2026 Earnings Report

Google achieved a record-breaking quarter with $102.3 billion in revenue, driven by a 13% increase in ad revenues and strong AI-powered growth in Search. Microsoft reported an 18% revenue increase to $77.7 billion, with advertising up 16% amid continued investments in AI and cloud infrastructure. Both tech giants are leveraging AI advancements to sustain growth in advertising and cloud services.

Optimixed’s Overview: How AI and Cloud Innovations Propel Google and Microsoft’s Record Earnings Growth

Google’s Historic Revenue Milestone Fueled by AI-Driven Search and Advertising

In Q3 2025, Alphabet (Google’s parent company) surpassed its previous records by hitting over $100 billion in quarterly revenue for the first time. Key highlights include:

  • Ad revenue growth: 13% year-over-year, reaching $74 billion.
  • Total revenue: $102.35 billion, a 16% increase compared to estimates.
  • AI integration: Introduction of AI Mode doubled Search queries and delivered over 100 product improvements in the quarter.
  • YouTube and Cloud: YouTube advertising revenue rose to $10.26 billion, and Google Cloud revenue increased to $15.15 billion.

CEO Sundar Pichai emphasized that Google’s full-stack AI approach is accelerating growth across all business segments, driving meaningful user engagement and revenue expansion.

Microsoft’s Steady Revenue Growth Supported by AI Investments and Expanding Cloud Capacity

Microsoft’s Q1 2026 earnings demonstrated strong momentum with an 18% overall revenue increase to $77.7 billion. Key financial and strategic takeaways include:

  • Advertising revenue: Up 16% year-over-year in search and news sectors.
  • Operating income: $38 billion, a 24% rise reflecting improved profitability.
  • AI and cloud investments: Plans to increase AI capacity by 80% and double data center footprint, including the cutting-edge Fairwater AI datacenter.
  • Partnerships: Renewed agreement with OpenAI, highlighting Microsoft’s commitment to AI innovation with strong shareholder returns.

CEO Satya Nadella highlighted the company’s “planet-scale cloud and AI factory” strategy as a key driver behind sustained growth and market share gains, particularly in Bing search with enhanced conversational AI features.

Conclusion: AI as a Catalyst for Growth in Digital Advertising and Cloud Services

Both Google and Microsoft continue to leverage artificial intelligence to enhance their core advertising platforms and cloud services. This strategic focus not only boosts user engagement but also significantly expands revenue streams, confirming AI’s pivotal role in shaping the future of tech-driven business performance.