Alphabet Inc. stock research
FY2025 Q3
Alphabet (GOOGL) Gross Margin — Quarter Ended Sep 30, 2025
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose in both comparisons. Gross margin improved slightly from the previous quarter and was higher than a year ago, indicating that gross profit grew at a faster rate than cost of revenue over both periods.
Gross margin takeaway
Quarter ended Sep 30, 2025 · FY2025 Q3
Revenue and gross profit both increased compared to the prior quarter and the same quarter last year, while cost of revenue also rose in both comparisons. Gross margin improved slightly from the previous quarter and was higher than a year ago, indicating that gross profit grew at a faster rate than cost of revenue over both periods.
- The strongest observable margin driver is the consistent expansion of gross margin, which improved both sequentially and year-over-year, signaling that the relationship between revenue and cost of revenue is moving favorably.
- Compared to the immediately preceding quarter, revenue, gross profit, and gross margin all increased, while cost of revenue also rose. Versus the same quarter one year earlier, all four metrics were higher, with gross margin improving notably.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
59.6%
Gross profit
$61.0B
Revenue
$102.3B
Cost of revenue
$41.4B
Quarter-over-quarter change
+0.1 pts
Year-over-year change
+0.9 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Dec 31, 2024 | $96.5B | $55.9B | $40.6B | 57.9% |
| Mar 31, 2025 | $90.2B | $53.9B | $36.4B | 59.7% |
| Jun 30, 2025 | $96.4B | $57.4B | $39.0B | 59.5% |
| Sep 30, 2025 | $102.3B | $61.0B | $41.4B | 59.6% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Jun 30, 2025
+0.1 pts
Year-over-year change
Sep 30, 2024
+0.9 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the consistent expansion of gross margin, which improved both sequentially and year-over-year, signaling that the relationship between revenue and cost of revenue is moving favorably.
Compared to the immediately preceding quarter, revenue, gross profit, and gross margin all increased, while cost of revenue also rose. Versus the same quarter one year earlier, all four metrics were higher, with gross margin improving notably.
Monitor whether gross margin can sustain its upward trajectory, especially as the company's filing context notes that revenues derived beyond advertising may affect margins.