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

Both Google and Microsoft reported its earnings today; Alphabet's Q3 2025 earnings and Microsoft's Q1 2026 earnings. Google reported ad revenues up by 13% with $74 billion and Microsoft reported ad revenues up by 16%. Google's overall revenue was up 16% at $102.3 billion, which is their largest revenue quarter of all time. Microsoft's overall revenue was up 18% at $77.7 billion.

I like to dig in specifically on the ad revenues but both companies performed very well.

GOOG Earnings

Google reported Q2 2025 earnings today, which showed Google's ad revenue was up again year-over-year, with an increase of 13%, and overall revenue is also up 16%.

If you want to compare Q2 2025 to Q1 2025, you will see ad revenue was up 4%, overall revenue was up 6.2% and profit was flat%.

Sundar Pichai, Google's CEO, said:

Alphabet had a terrific quarter, with double-digit growth across every major part of our business. We delivered our first-ever $100 billion quarter.

Here is a chart plotting Google's overall revenue, then ad revenue and then profit over the past several quarters:

Here is the snippet from the earnings report:

Highlights from Google earnings:

• Revenue: $102.35 billion vs. $99.89 billion adj. estimated
• Earnings per share: $2.87 not immediately comparable
• YouTube advertising revenue: $10.26 billion vs. $10.01 billion
• Google Cloud revenue: $15.15 billion vs. $14.74 billion
• Traffic acquisition costs (TAC): $14.87 billion vs. $14.82 billion

Just posted Q3 earnings. We delivered our first-ever $100B quarter driven by double-digit growth across every major part of our business. (Five years ago, our quarterly revenue was at $50B🚀)

Our full-stack approach to AI is driving real momentum and we’re shipping at speed.… pic.twitter.com/L4Yz1iUuyT

— Sundar Pichai (@sundarpichai) October 29, 2025

Google posted an earnings statement saying with Search, "AI Overviews drive meaningful query growth" and that AI Mode saw "queries doubled over the quarter." Adding with AI Mode Google "shipped over 100 improvements to the product in Q3" and realized "incremental total query growth for Search" through AI Mode.

Microsoft Earnings

Microsoft reported its first quarter 2026 earnings and it showed that its search and advertising revenue was up for 16% but down from the three-peat of up by 21%. The previous two quarters it was up 21% as well, then the quarter before that was up 18%, then 19% but before that it was 12% and 8%.

Microsoft wrote, "Search and news advertising revenue excluding traffic acquisition costs increased 16% (up 15% in constant currency)."

Here are the highlights of the financial report:

• Revenue was $77.7 billion and increased 18% (up 17% in constant currency)
• Operating income was $38.0 billion and increased 24% (up 22% in constant currency)
• Net income, on a GAAP basis, was $27.7 billion and increased 12%, and on a non-GAAP basis was $30.8 billion and increased 22% (up 21% in constant currency)
• Diluted earnings per share, on a GAAP basis, was $3.72 and increased 13%, and on a non-GAAP basis was $4.13 and increased 23% (up 21% in constant currency)
• Non-GAAP results exclude the impact from investments in OpenAI, explained in the Non-GAAP Definition section below

Here is how the advertising revenue chart looks specific to search and news advertising revenue increases quarter to quarter (over):

Satya Nadella, Microsoft's CEO, said:

“Our planet-scale cloud and AI factory, together with Copilots across high value domains, is driving broad diffusion and real-world impact," said Satya Nadella, chairman and chief executive officer of Microsoft. “It’s why we continue to increase our investments in AI across both capital and talent to meet the massive opportunity ahead.”

2/ We’re building a planet-scale cloud and AI factory.

We’ll increase our AI capacity by 80% this year, and nearly double our DC footprint over the next two.

That includes Fairwater in Wisconsin, the world’s most powerful AI datacenter, which will scale to two gigawatts alone.…

— Satya Nadella (@satyanadella) October 29, 2025

4/ And this week, we signed a new agreement with OpenAI, a milestone for both companies.

It’s been an incredible investment, with nearly 10X return and no carry. All the value goes straight to shareholders.

Another thing I feel super proud about is that Microsoft is now behind…

— Satya Nadella (@satyanadella) October 29, 2025

In the Microsoft earnings call the executives said, "In Bing, our overview pages now include embedded conversational capabilities. We took share again in search."

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