Alphabet Is More Than Google Search

Alphabet may be best known for Google Search, but its business stretches far beyond the search bar. While the vast majority, around 75 percent, of Alphabet’s revenue still comes from advertising – much of it tied directly to search – the company has steadily expanded into new areas.

Google Cloud, offering infrastructure and AI-driven services to businesses, is perhaps the most important example, representing a significant and fast-growing share of Alphabet’s revenue. In the second quarter of 2025, Google Cloud revenue amounted to $13.6 billion, representing 14 percent of the company’s total revenue. That’s up more than 300 percent from $3 billion and less than 8 percent of total revenue five years ago.

Another sizeable segment includes almost all of Alphabet’s other activities, including hardware (e.g. Pixel and Nest devices), app sales and subscriptions (e.g. YouTube TV, Music or Premium). This segment accounted for 12 percent of Alphabet’s revenue in the most recent quarter and while it doubled over the past five years, it’s not growing as quickly or as profitably as Google Cloud.

Finally, there’s Alphabet’s (in)famous “Other Bets”, i.e. the company’s investments in new and emerging technologies. These include companies such as Calico, CapitalG, GFiber, GV, Verily, Waymo and Wing. As the name suggests, these investments are bets on the future that don’t play a meaningful role in the present. In Q2 2025, Other Bets accounted for just 0.3 percent of Alphabet’s revenue.

As our chart shows, Alphabet is highly profitable as well. In the past quarter, the company had a gross profit margin of 60 percent and an operating margin of 32 percent. With net income of $28 billion, the company’s net profit margin was 29 percent, which is significantly higher than the industry average but slightly lower than that of fellow tech giants Microsoft (36 percent) and Meta (39 percent).