Alphabet Inc., Google’s parent company, reported strong financial results for the second quarter of 2025, surpassing Wall Street expectations. The company posted $96.4 billion in revenue, up 14% year-over-year. Earnings per share also rose 22% to $2.31, outperforming analyst estimates of $2.17–$2.20.
Google Cloud, Search, and YouTube Drive Alphabet’s Growth
Net income for the quarter climbed 19% to $28.2 billion, while the operating margin remained solid at 32.4%. Its core business units all saw double-digit growth:
- Google Cloud revenue jumped 32%, hitting $13.6 billion. This growth was powered by demand for core cloud products, AI infrastructure, and generative AI services.
- Google Services, which include YouTube ads, Google Search, and subscriptions, earned $82.5 billion, a 12% increase from last year.
- YouTube ads alone generated $9.8 billion in revenue.
- The company’s “Other Bets” segment, including Waymo and Verily, brought in $373 million, slightly up from $365 million last year. However, it reported a $1.25 billion operating loss, wider than last year’s $1.13 billion loss.
AI Takes Center Stage: Gemini and AI Overviews See Rapid Adoption
Alphabet’s AI tools are rapidly gaining traction:
- AI Overviews, Google’s AI-powered search summaries, now reach over 2 billion monthly users in 200+ countries, up from 1.5 billion just a quarter ago.
- The Gemini AI chatbot has surpassed 450 million monthly active users.
Interestingly, the company also announced an increase in its 2025 capital expenditure forecast to $85 billion, a $10 billion jump from its February projection. This uptick is driven by rising demand for cloud infrastructure and AI services.
CEO Sundar Pichai confirmed this, saying:
“We had a standout quarter, with robust growth across the company. We are leading at the frontier of AI and shipping at an incredible pace. AI is positively impacting every part of the business, driving strong momentum. Search delivered double-digit revenue growth, and our new features, like AI Overviews and AI Mode, are performing well. We continue to see strong performance in YouTube as well as subscriptions offerings. And Cloud had strong growth in revenues, backlog and profitability. Its annual revenue run-rate is now more than $50 billion. With this strong and growing demand for our Cloud products and services, we are increasing our investment in capital expenditures in 2025 to approximately $85 billion and are excited by the opportunity ahead.”
GOOGL Stock Dips Despite Record Quarter
Still, Alphabet’s stock had a mild reaction. Some investors were worried about rising spending and growing competition from AI-powered search engines. This raised doubts about future returns and how efficiently the company is running.
Moving on, while these AI advancements are enhancing user engagement and search capabilities, they’re also driving up energy consumption. It’s becoming a growing concern for Alphabet’s sustainability efforts.
Let’s see how Google is balancing these two hand in hand.
Alphabet’s Record-Breaking Clean Energy Procurement
Alphabet remains committed to its climate moonshots, aiming to run its operations on carbon-free energy 24/7. In 2024, it procured over 8 GW of clean energy, the highest in company history and double the amount in 2023.
- Since 2010, the company has signed more than 170 clean energy deals totaling over 22 GW, nearly equivalent to Portugal’s total renewable energy capacity.
These deals span across North America, Europe, Latin America, and the Asia-Pacific.
In Europe, Alphabet expanded its offshore wind projects in the Netherlands and added new PPAs in Italy, Belgium, and Poland. In Asia, it supported clean energy in India, Japan, Singapore, and Taiwan, customizing agreements to local market needs.
Energy Efficiency Across Data Centers: Small Improvements, Big Impact
Google or Alphabet is also focused on maximizing energy efficiency across its infrastructure. As per the company’s latest sustainability report, its global data center fleet reached a record low power usage effectiveness (PUE) of 1.09 in 2024. While the improvement from 1.10 may seem minor, it significantly reduces electricity consumption at Alphabet’s scale.
Their custom-designed high-performance servers and smart building technologies further optimize energy use. As a result, Google’s data centers now deliver over six times more computing power per unit of electricity than they did five years ago.
Tackling AI’s Energy Demand with Smarter Computing
With the rapid rise in AI workloads, Alphabet is adapting its infrastructure through “carbon-intelligent computing.” This system shifts computing tasks based on when and where the grid has cleaner energy, helping ease stress on local power networks and cut emissions.
The platform balances compute needs with local energy availability, ensuring users experience uninterrupted service whether they’re watching YouTube, using Google Maps, or interacting with Gemini.
SMRs and Geothermal: Bold Steps Toward 24/7 Clean Power
Alphabet is also leading the charge in advanced energy technologies. In 2024, it became the first company to sign corporate deals for nuclear power from Small Modular Reactors (SMRs). Partnering with Kairos Power, the company aims to add up to 500 MW of clean nuclear energy to U.S. grids by 2035. The first reactor is expected by 2030.
The tech giant also made progress with advanced geothermal projects, helping diversify its clean energy mix and offering reliable, around-the-clock power for its energy-hungry AI systems.
- READ MORE:
- Google Inks World’s Largest Hydropower Deal with Brookfield at $3B to Power AI Growth
- Google Bets Big on Next-Gen Nuclear and Carbon Credits from Superpollutants For a Greener AI
Emissions: Progress, But Scope 3 Still Rising
Alphabet’s total ambition-based emissions reached 11.5 million metric tons CO₂e in 2024. While emissions from operations dropped due to cleaner energy use, Scope 3 emissions rose by 22%. It was driven largely by data center expansion and increased hardware production for AI.
Despite this, the company increased its carbon-free energy (CFE) usage across offices and data centers to 66%, and achieved at least 80% hourly CFE in 9 out of 20 global grid regions.
Expanding Carbon Removals
At the same time, Google is working to cancel out any remaining emissions by 2030 using a growing portfolio of carbon credits that deliver real climate benefits. The company is accelerating various carbon removal projects and forming strategic partnerships to reach its net-zero goal.
In 2024, Google expanded its carbon removal portfolio in a big way. It signed 16 new offtake agreements worth over $100 million, covering about 728,300 tonnes of CO₂ removal credits. This brought its total carbon removal portfolio to around 782,400 tonnes—a 14-fold jump compared to 2023.
Real-World Climate Impact at Scale
Alphabet’s sustainability efforts go beyond internal operations. In 2024, five of its products: Nest thermostats, Google Earth Pro, Solar API, fuel-efficient routing in Maps, and Green Light collectively helped reduce 26 million metric tons of GHG emissions. That’s more than twice Alphabet’s total annual emissions and equivalent to the yearly energy use of 3.5 million U.S. homes.
Alphabet Faces Key Challenges on the Road to Net-Zero
The company acknowledges that reaching net-zero emissions by 2030 is getting tougher. One big challenge is the slow progress in clean energy technology. For example, geothermal and small modular nuclear reactors (SMRs) remain costly and require additional government support to expand.
The problem is even more significant in emerging markets, such as the Asia-Pacific. Many of these areas still lack sufficient carbon-free electricity options to support Alphabet’s clean energy goals.
Thus, the road ahead is uncertain. AI’s rising energy demand, regulatory volatility, and slower-than-expected clean tech deployment pose serious challenges. For Alphabet, balancing innovation with climate responsibility remains a key test in the years leading to 2030.
The post Alphabet’s (GOOGL Stock) Q2 2025: Growth Soars but AI Challenges Net Zero Goals appeared first on Carbon Credits.
Most businesses that decide to act on their net-zero targets reach the same point of friction. Buying carbon credits has meant tracking down brokers, sitting through sales calls, and requesting a quote just to learn a price, sometimes with limited proof of what you are buying.
The earnings calls that quietly reframed climate from sustainability question to operating risk.
Three earnings calls in the last 18 months tell the story without any help from a press release.
Hershey, May 2024: cocoa price exposure compresses margin, and the company attributes part of the cost shock to West African weather. Olam, July 2024: coffee climate exposure quantified in the annual report. JBS, January 2025: supply chain climate disclosures expanded materially in response to investor pressure and regulatory expectation. None of these companies issued the announcement as climate news. They issued it as financial news. The climate-linked supply chain risk did not arrive with a sustainability framing; it arrived as a P&L line.
You are probably reading this article because you suspect the same thing is happening to your business. This piece walks through what is showing up on which earnings calls, how procurement and finance leaders are quantifying the exposure, and what serious corporates are doing about it before the regulator asks.
Where climate risk has already appeared in earnings
The pattern is consistent across resource-intensive sectors. A weather event compresses supply, the price spikes, the cost flows through the income statement, and the analyst on the call asks whether the event is anomalous or structural. Increasingly, the honest answer is the second one.
Cocoa is the cleanest example. The 2023 to 2024 West African harvest fell sharply on the back of erratic rainfall and disease. Cocoa futures more than tripled. Companies with concentrated West African sourcing absorbed the cost; companies with diversified sourcing absorbed less. The exposure was not climate as ESG topic. It was climate as cost of goods.
Coffee follows the same pattern. Brazilian and Vietnamese harvests have moved on weather more sharply across the last several seasons. Roasters with long-tenor supplier relationships and origin diversification have managed the volatility; roasters with spot-market exposure have not. Wheat, sugar, palm oil, beef: the same dynamic in different commodities, a pattern the IPCC AR6 Working Group II report projects will intensify across agricultural systems through mid-century.
What this means: climate risk is no longer a footnote in the 10-K. It is a line item the CFO has to explain on the call.
The three commodity exposures that hit margin first
For most companies with material Scope 3 exposure, three exposures dominate the near-term P&L risk.
- Concentrated single-origin sourcing in a climate-vulnerable region. If your tier-one supply for any material commodity sits in one geography, you have a concentration risk that climate amplifies. Diversification across origins is the obvious hedge, but it takes years to build and requires relationships you cannot acquire by tender.
- Supplier financial fragility under climate stress. Smallholder farmers, who supply a large share of the global cocoa, coffee, and palm oil market, do not carry the balance sheets to absorb yield shocks. When yields collapse, they exit. When they exit, your supply base shrinks, and the surviving suppliers raise prices. The risk is structural, not cyclical.
- Logistics and storage exposure to extreme weather. Hurricane disruptions to Gulf shipping, drought-driven Panama Canal restrictions, flooding in European inland waterways: each of these has moved input costs in the last three years, a pattern documented in Munich Re’s natural catastrophe data. The exposure shows up as a one-quarter event in the financial press but accumulates over time on the cost line.
TCFD and ISSB disclosure changes
The disclosure architecture has now caught up with the risk. The Task Force on Climate-related Financial Disclosures, whose recommendations are now embedded in the ISSB’s IFRS S2 climate standard, requires companies to disclose climate-related risks across physical and transition categories, with quantification where possible.
For physical risk specifically (the climate-linked supply chain risk you are reading about), the disclosure must address both acute exposures (extreme weather events) and chronic exposures (gradual changes in temperature, precipitation, and growing seasons). The disclosure must address the time horizon over which the risk is material, the parts of the value chain exposed, and the financial impact under different scenarios.
The CSRD imposes similar requirements under European law, with double materiality (both financial and impact materiality) embedded in the assessment. The practical effect: your auditors and your investor relations team now need a defensible answer to the climate-linked supply chain risk question, and the answer needs to be quantified.
What procurement and finance can do now
Three actions matter near-term.
Map your exposure. Most companies do not have a clear view of which tier-one and tier-two suppliers sit in which climate-vulnerable geographies. Without the map, you cannot quantify the risk, and without the quantification, you cannot disclose it credibly. The map is the foundation, and World Resources Institute climate risk research provides useful public tooling to start.
Diversify and deepen, in that order. Diversification across origins reduces concentration risk, but the deeper move is to invest in the resilience of the suppliers you already have. Regenerative practices, agroforestry, soil health interventions: these reduce yield volatility under climate stress and protect your input cost trajectory.
Embed the climate spend inside procurement, not outside it. Treating climate risk as a sustainability cost line subordinates it to the ESG budget. Treating it as a procurement and resilience investment puts it in the budget that matters, which is the cost-of-goods budget that the CFO defends quarterly.
Nature-based supply chain investments are the asset class designed for exactly this purpose. They sit inside the value chain, they reduce climate-linked supply risk, they generate verifiable Scope 3 reductions, and they produce the documentation an auditor and a regulator can both test.
If you are quantifying climate-linked supply chain risk in advance of the next earnings cycle or the next disclosure period, the carbon and sustainability experts at Carbon Credit Capital can help you map your exposure and structure a Dual-Value Model response that addresses reduction, resilience, and disclosure-readiness in a single program. Schedule a consultation.
More and more small and medium-sized businesses are hearing the same question from their larger customers: What is your carbon footprint? That question now travels down entire supply chains, and it arrives next to tender requirements, certification criteria, and rising customer expectations.
-
Climate Change1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Greenhouse Gases2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Greenhouse Gases1 year ago
Guest post: Why China is still building new coal – and when it might stop
-
Climate Change2 years ago嘉宾来稿：满足中国增长的用电需求 光伏加储能“比新建煤电更实惠”
-
Climate Change2 years ago
Bill Discounting Climate Change in Florida’s Energy Policy Awaits DeSantis’ Approval
-
Renewable Energy11 months agoSending Progressive Philanthropist George Soros to Prison?
-
Greenhouse Gases1 year ago
嘉宾来稿：探究火山喷发如何影响气候预测
-
Carbon Footprint2 years agoUS SEC’s Climate Disclosure Rules Spur Renewed Interest in Carbon Credits