01—Abstract
Summary
Summary of the 10-Q filed October 29, 2026. Cited figures are marked; the original filing is the authoritative source.
Alphabet Inc. (GOOGL) reported a strong top-line performance in its Q3 2026 10-Q filing, with total revenues reaching $127.6 billiona, a significant 25% increase year-over-year.
This growth was primarily fueled by a remarkable 103% surge in Google Cloud revenues, highlighting its expanding market presence, alongside an 11% increase in Google Services. Despite revenue growth, net income available to common stockholders saw a 25% decline to $26.2 billionb, largely impacted by a substantial increase in "Other income (expense), net," which swung from a significant gain in the prior year period to a notable loss in the current period. This shift was primarily attributed to changes in the valuation of equity and debt securities, underscoring the volatility associated with Alphabet's investment portfolio.
The company continued to invest heavily in its future, with substantial increases in capital expenditures, particularly in technical infrastructure to support AI initiatives. While the core advertising business remains robust with increases in paid clicks and cost-per-click, the significant investments, combined with the volatile "Other income (expense), net" and ongoing regulatory challenges, present a complex financial picture. Investors should note the company's strategic acquisitions, such as Wiz and Intersect, aimed at bolstering its cloud and AI capabilities, alongside its significant financial flexibility derived from strong operating cash flows and substantial cash reserves.
02—Key points
Key Highlights
- Total revenues grew 25% year-over-year to $127.6 billion, driven by strong performance across segments.
- Google Cloud revenue more than doubled, increasing by 103% to $30.7 billion, demonstrating significant market traction.
- Google Services revenue increased by 11% to $96.3 billion, with notable growth in subscriptions and devices.
- Net income available to common stockholders decreased by 25% to $26.2 billion, largely due to a substantial swing in 'Other income (expense), net' from a gain to a loss.
- Capital expenditures more than doubled year-over-year to $132.0 billion, reflecting significant investment in technical infrastructure and AI.
- The company completed two major acquisitions: Wiz for $29.5 billion and Intersect for $5.9 billion, strengthening its AI and cloud offerings.
- Alphabet continues to hold a strong liquidity position with $265.1 billion in cash, cash equivalents, and marketable securities as of September 30, 2026.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q3 FY2026, Alphabet kept $0.21.
- Revenue$127.58B100.0%
- Cost of revenue−$51.42B40.3%
- Gross profit$76.16B59.7%
- Operating costs−$35.58B27.9%
- Operating income$40.58B31.8%
- Interest, other & tax−$14.11B11.1%
- Net income$26.47B20.7%
04—Financials
Financial Highlights
Figures from 10-QQ3 FY2026filed October 29, 2026Financial Statements
Q3 FY2026 against Q3 FY2025
| Line item | Q3 FY2026Q3 FY2025 | Change |
|---|---|---|
| Revenue | $127.58B$102.35B | +24.7% |
| Cost of Revenue | $51.42B$41.37B | +24.3% |
| Gross Profit | $76.16B$60.98B | +24.9% |
| R&D Expenses | $20.64B$15.15B | +36.2% |
| Operating Expenses | $87.00B$71.12B | +22.3% |
| Operating Income | $40.58B$31.23B | +29.9% |
| Net Income | $26.47B$34.98B | −24.3% |
| EPS (Basic) | $2.14$2.89 | −26.0% |
| EPS (Diluted) | $2.12$2.87 | −26.1% |
| Shares Outstanding (Basic) | 12.26B12.09B | +1.4% |
| Shares Outstanding (Diluted) | 12.37B12.20B | +1.4% |
05—Questions
Frequently Asked Questions
What drove the significant increase in Google Cloud revenue?
Google Cloud revenue experienced a substantial increase of 103% year-over-year, reaching $30.7 billion. This growth was primarily driven by strong performance in Google Cloud Platform services, particularly infrastructure and platform services, as well as an increase in TPU system sales. The acquisition of Wiz is also expected to contribute to future growth in this segment.
Why did net income decline despite strong revenue growth?
Net income available to common stockholders decreased by 25% to $26.2 billion. This was largely due to a significant negative swing in 'Other income (expense), net,' which moved from a gain of $12.8 billion in Q3 2025 to a loss of $8.2 billion in Q3 2026. This volatility was primarily driven by unrealized losses on equity and debt securities, including a significant decrease in gains from non-marketable equity securities and losses on marketable equity securities.
How is Alphabet investing for future growth, and what are the key areas of investment?
Alphabet is making substantial investments for future growth. Capital expenditures increased significantly, with $132.0 billion spent in the first nine months of 2026, primarily directed towards technical infrastructure to support AI development and deployment. The company also made strategic acquisitions, such as Wiz (AI-driven security) and Intersect (renewable energy), to enhance its cloud and AI capabilities. These investments are crucial for scaling AI infrastructure and global compute.
What are the key risks and uncertainties highlighted in the filing?
Key risks and uncertainties include ongoing antitrust investigations and litigation in the US and Europe, which have resulted in significant fines and potential operational changes. The company also faces risks related to the rapid evolution and ethical considerations of AI, potential cybersecurity threats, data privacy regulations, and the inherent risks associated with significant investments in new businesses and technologies. Geopolitical tensions and macroeconomic conditions are also noted as factors that could impact future performance.
06—Continue