Google Earnings: Cloud Revenue Up 103%, Capex Reaches $51.4 Billion
Google Cloud revenue rose 103% in Alphabet's third quarter of 2026, while Google Search revenue growth slowed to 12% from 17% the quarter before. By our calculation, Cloud brought about 62% of the revenue Alphabet added from a year earlier, as spending on data centers and equipment more than doubled to $51.4 billion.
The short answer. Alphabet's sales grew 25% in the three months to September, and the business that rents computing power and AI tools to other companies did most of the work. That matters well beyond shareholders, because Alphabet says most of its spending on data centers and equipment goes to the technical infrastructure behind its AI. In the quarter, that spending ran $9.1 billion above the cash its businesses brought in. By our calculation, landing inside the spending range Alphabet gave in July would take $63 billion to $73 billion more in the last three months of 2026.
Alphabet in the third quarter of 2026
On this page
- Google earnings for Q3 2026: revenue, profit and EPS
- How fast did Google Cloud grow?
- Why did Google Search and YouTube ad growth slow?
- How much is Alphabet spending on AI data centers in 2026?
- How is Alphabet paying for its AI spending?
- Does Alphabet pay a dividend or buy back stock?
- Frequently asked questions
Google earnings for Q3 2026: revenue, profit and EPS
Alphabet sold $127.6 billion of ads, cloud services, subscriptions and devices in the quarter. Profit from its businesses rose, but earnings per share fell, because the shares Alphabet owns in other companies lost value.
Revenue grew 25% from a year earlier, Alphabet's 13th straight quarter of growth above 10%, the company said in its third quarter release. Chief executive Sundar Pichai said, "We had a strong quarter and are now on a half-trillion dollar revenue run rate." A run rate is one quarter's sales times four.
Operating income rose 30% to $40.6 billion, the profit from running the businesses before investment gains and taxes. The operating margin was 31.8%, that profit as a share of revenue, against 30.5% a year earlier, according to Alphabet's earnings slides.
Earnings per share went the other way, falling to $2.12 from $2.87. The cause sits below operating income. Alphabet holds stakes in other companies, and in this quarter it booked an $8.7 billion loss on them, counting both sold and unsold holdings. The company says that loss cut its earnings per share by $0.55.
A year earlier the same line had added $10.7 billion of gains. That swing explains why profit available to common shareholders fell 25% to $26.2 billion while the businesses themselves earned more.
In after-hours trading at 4:41 p.m. ET, Class A shares were at $294.20, 9.4% below the $324.89 close, according to StockTitan real-time Nasdaq data.
| Measure | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Revenue | $102.35 billion | $127.58 billion | +25% |
| Operating income | $31.23 billion | $40.58 billion | +30% |
| Operating margin | 30.5% | 31.8% | |
| Gain (loss) on equity securities | $10.73 billion | minus $8.66 billion | |
| Net income for common shareholders | $34.98 billion | $26.17 billion | minus 25% |
| Diluted earnings per share | $2.87 | $2.12 | minus 26% |
| Revenue in the United States | $48.76 billion | $67.68 billion | +39% |
| Employees | 190,167 | 204,757 | +8% |
Source: Alphabet third quarter 2026 results release, Form 8-K exhibit 99.1, October 28, 2026, quarter ended September 30; the Q3 2025 operating margin as stated in Alphabet's third quarter 2026 earnings slides.
How fast did Google Cloud grow?
Google Cloud, which rents computing power, storage and AI tools to businesses, more than doubled its sales from a year earlier. By our count it brought about 62% of all the revenue Alphabet added, so Cloud, not Search, now carries most of the company's growth.
Cloud revenue reached $30.7 billion. Growth has sped up every quarter this year, from 63% in the first quarter to 82% in the second and 103% now. Alphabet called it "record growth" in the release, the fastest the unit has grown in its reported history.
Pichai credited "huge demand for our AI infrastructure and AI solutions." A TPU is Google's own AI chip. Since the second quarter Google has also sold complete TPU systems to customers for their own data centers, and the release says "TPU systems sales were also a meaningful contributor to revenue growth." It gives no dollar figure for them.
Microsoft, which reported the same evening, said in its results release that revenue from Azure, its cloud computing business, grew 48%. Google Cloud also counts subscriptions to Workspace, Google's Gmail and Docs office apps, and TPU system sales, so the two lines do not hold the same mix of business.
Cloud is also far more profitable than a year ago. Its reported segment operating margin was 36.2%, against 23.7% a year earlier, the slides show. That figure leaves out Alphabet-level costs, mainly shared AI research, which the release books outside the segments; they came to $7.7 billion in the quarter.
Google Services, the segment that holds Search and YouTube, still earns far more: $39.2 billion of operating income, against Cloud's $11.1 billion. Cloud supplies most of the new revenue, while the older businesses still supply most of the profit.
On the consumer side, Pichai said the Gemini app "has reached one billion users," and that the connections developers use to reach Google's own AI models are "now processing nearly 32 billion tokens per minute, more than four times what we processed a year ago." A token is a small piece of text an AI model reads or writes.
The quarter's release gives no backlog, the value of signed Cloud contracts not yet billed. On the second quarter call, Alphabet put it at $514 billion at the end of June, and finance chief Anat Ashkenazi said Alphabet expected "to recognize just over 50% of the total backlog as revenue over the next 24 months." In plain terms, about half of those signed contracts were due to turn into sales within two years.
Show the data
| Category | Google Cloud | Google Search and other | YouTube ads |
|---|---|---|---|
| Q1 2026 | 63.4% | 19.1% | 10.7% |
| Q2 2026 | 81.8% | 16.8% | 12.9% |
| Q3 2026 | 102.6% | 12.0% | 9.2% |
Why did Google Search and YouTube ad growth slow?
Search and YouTube still bring in most of Alphabet's money, and both kept growing. They grew more slowly than earlier in the year, while Cloud sped up, which is why the mix of the company is shifting.
Google Search and other revenue rose 12% to $63.35 billion. It had grown 19% in the first quarter and 17% in the second.
Alphabet had warned in July of a tougher comparison. Ashkenazi said that in the third quarter "we will begin lapping an acceleration in Search performance that began in the third quarter last year," meaning the year-earlier figure it is compared with was already strong. She also expected a small drag from currency moves, "seen primarily in Search and YouTube Ads."
The company points to how much people search. Its release says the growth rate of Search queries from a year earlier was "the highest it has been in the last five years." The release does not break down how much of the slower revenue growth came from the strong year-earlier comparison, currency, ad prices or the kinds of searches people made.
YouTube ads revenue rose 9% to $11.21 billion, after 13% growth in the second quarter.
Subscriptions, platforms and devices, which includes YouTube Premium and Google One, grew 11%. Pichai said YouTube Music and Premium passed 150 million subscribers, trials included.
| Revenue line | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Google Search and other | $56.57 billion | $63.35 billion | +12% |
| YouTube ads | $10.26 billion | $11.21 billion | +9% |
| Google Network (ads on partner sites) | $7.35 billion | $7.46 billion | +1% |
| Subscriptions, platforms and devices | $12.87 billion | $14.29 billion | +11% |
| Google Cloud | $15.16 billion | $30.71 billion | +103% |
Source: Alphabet third quarter 2026 results release; changes as stated in Alphabet's third quarter 2026 earnings slides.
How much is Alphabet spending on AI data centers in 2026?
Alphabet spent $51.4 billion on buildings, servers and other equipment in the quarter, more than twice a year earlier. To land inside the yearly range it gave in July, it would need to spend more again in the last three months of 2026.
This spending is capital expenditure, or capex: money for things that last years, such as data centers and the chips inside them. It shows in the cash flow statement as purchases of property and equipment. In July, Alphabet said most of it goes to "technical infrastructure to support our investments in AI."
Capex has risen every quarter since the third quarter of 2024, when it was $13.1 billion. In the first nine months of 2026 it came to $132.0 billion.
On the July call, Ashkenazi said Alphabet was "updating our full year 2026 CapEx guidance range" to $195 billion to $205 billion, "up from our previous estimate." She said Alphabet expected capex "to increase significantly in 2027." The release published today neither repeats nor changes that range.
To land inside the July range, Alphabet would spend about $63 billion to $73 billion in the fourth quarter, by our calculation. That is 23% to 42% more than the third quarter's $51.4 billion.
Alphabet also spent more than Microsoft and Meta in the same three months. Microsoft's purchases of property and equipment came to $39.4 billion, and Meta's, in its results release, to $33.9 billion. StockTitan covered both reports, Microsoft's and Meta's.
Set against the cash each company's businesses brought in, Alphabet fell furthest short. By our calculation, Microsoft's cash from operations covered its spending with about $18.6 billion to spare, while Meta came up about $1.2 billion short.
The spending already shows in costs. Depreciation rose 49% to $8.4 billion in the quarter, the charge that spreads the price of equipment over its life. Alphabet's total assets passed $1 trillion on September 30.
Show the data
| Category | Value |
|---|---|
| Q3 2024 | $13.06B |
| Q4 2024 | $14.28B |
| Q1 2025 | $17.20B |
| Q2 2025 | $22.45B |
| Q3 2025 | $23.95B |
| Q4 2025 | $27.85B |
| Q1 2026 | $35.67B |
| Q2 2026 | $44.92B |
| Q3 2026 | $51.36B |
| Company, quarter ended September 30, 2026 | Purchases of property and equipment | Cash from operations | Cash from operations minus purchases |
|---|---|---|---|
| Alphabet | $51.36 billion | $42.29 billion | minus $9.07 billion |
| Microsoft (fiscal first quarter of 2027) | $39.37 billion | $58.00 billion | $18.63 billion |
| Meta | $33.94 billion | $32.79 billion | minus $1.16 billion |
Source: each company's results release for the quarter, cash flow statement (Microsoft labels the line additions to property and equipment); the last column is our calculation. Meta's own capital expenditures measure, which adds principal payments on finance leases, was $34.91 billion.
How is Alphabet paying for its AI spending?
For the second quarter in a row, Alphabet spent more on equipment than its businesses brought in as cash. It still holds large cash reserves, and in the quarter it also borrowed heavily.
Cash from operations in the quarter was less than Alphabet spent on capex. Free cash flow was minus $9.1 billion, the cash left after that spending, after minus $5.9 billion in the second quarter. A year earlier it was plus $24.5 billion. Both sides moved: cash from operations fell from a year earlier, while capex more than doubled.
Over the first nine months of 2026 free cash flow was minus $4.8 billion, against plus $48.7 billion in the same months of 2025, by our calculation. Over the last twelve months, the company's own measure was still positive.
In the quarter Alphabet sold notes, a form of long-term borrowing, for $28.7 billion. It also issued new Class A and Class C shares for net proceeds of $12.4 billion through its at-the-market program, which sells stock gradually at market prices. In July, Ashkenazi tied that program to paying taxes on employee stock awards.
Long-term debt reached $125.1 billion on September 30, more than two and a half times its level at the end of 2025. Alphabet still held $265.1 billion of cash and marketable securities on that date, money it can reach quickly.
For how the measure works, see our guide to free cash flow.
Show the data
| Category | Value |
|---|---|
| Q3 2025 | $24.46B |
| Q4 2025 | $24.55B |
| Q1 2026 | $10.12B |
| Q2 2026 | -$5.86B |
| Q3 2026 | -$9.07B |
| Measure | Q3 2025 | Q3 2026 |
|---|---|---|
| Net cash provided by operating activities | $48.41 billion | $42.29 billion |
| Purchases of property and equipment (capex) | $23.95 billion | $51.36 billion |
| Free cash flow | $24.46 billion | minus $9.07 billion |
| Free cash flow, trailing twelve months | $73.55 billion | $19.75 billion |
| Interest expense | $143 million | $967 million |
Source: Alphabet third quarter 2026 results release, cash flow statement; free cash flow, quarterly and trailing twelve months, as stated in Alphabet's third quarter 2026 earnings slides; interest expense from the release's other income table; quarters ended September 30.
Does Alphabet pay a dividend or buy back stock?
Alphabet still pays a quarterly dividend of 22 cents a share. It has bought back no stock in 2026, after $39.8 billion of buybacks in the same months of 2025.
The board declared the $0.22 dividend on Class A, Class B and Class C shares, payable on December 14, 2026 to shareholders on its books on December 7. It also declared $15.63 a share on its two series of mandatory convertible preferred stock, preferred shares that must turn into common shares on a set date, payable November 15.
Alphabet bought back no shares in the quarter, after $11.5 billion a year earlier. With new shares sold and none bought back, shares outstanding rose to 12.29 billion from 12.09 billion at the end of 2025.
Alphabet's financial history by quarter is on its StockTitan financials page, and the stock's overview is on the GOOGL page.
Put together, our reading is that Alphabet's two engines are moving apart. Google Services, which includes Search and YouTube, still supplies most of the operating profit, while Cloud now supplies most of the new revenue. The spending on data centers and equipment behind that growth tops the cash the whole company brings in from its businesses, a gap Microsoft does not have. Fourth quarter cash flow will show whether that shortfall widens, and the next backlog figure will update the picture of signed Cloud demand.
What to watch
- The Cloud backlog at September 30: Alphabet's third quarter Form 10-Q, due in the coming days, reports it as remaining performance obligations.
- Whether full-year capex lands inside $195 billion to $205 billion: the fourth quarter results release, early in 2027.
Our numbers
- About 62% of Alphabet's added revenue came from Cloud: Cloud's $15.55 billion increase divided by Alphabet's $25.23 billion increase, third quarter 2026 against third quarter 2025.
- About $63 billion to $73 billion of capex left for the fourth quarter, 23% to 42% above the third quarter: the July range of $195 billion to $205 billion minus the $131.95 billion spent in the first nine months.
- Free cash flow of minus $4.8 billion in the first nine months of 2026: cash from operations of $127.15 billion minus capex of $131.95 billion.
- About $18.6 billion to spare at Microsoft and about $1.2 billion short at Meta, against $9.1 billion short at Alphabet: each company's third quarter cash from operations minus its purchases of property and equipment, from its results release.
Frequently asked questions
How were Alphabet's earnings?
Revenue rose 25% to $127.6 billion and operating income rose 30% to $40.6 billion in the third quarter of 2026. Diluted earnings per share fell to $2.12 from $2.87, because of an $8.7 billion loss on the value of companies Alphabet invests in.
How much did Google Cloud revenue grow in Q3 2026?
Google Cloud revenue rose 103% to $30.7 billion, from $15.2 billion a year earlier, the fastest growth Alphabet has reported for the unit.
How much is Google spending on AI?
Alphabet's capex was $51.4 billion in the third quarter and $132.0 billion in the first nine months of 2026. In July it guided to $195 billion to $205 billion for the full year, mostly for AI data centers and servers.
Why did Alphabet's profit fall?
Profit available to common shareholders fell 25%, and the release shows an $8.7 billion loss on Alphabet's stakes in other companies, against a $10.7 billion gain a year earlier. Operating income from its businesses rose 30%.
Is Google stock down today?
Alphabet released its third quarter results shortly after 4 p.m. ET on October 28, 2026. At 4:41 p.m. ET, Class A shares traded at $294.20 after hours, 9.4% below the $324.89 close, according to StockTitan real-time Nasdaq data.
What time is the Alphabet earnings call?
Alphabet scheduled its call for 4:30 p.m. ET on October 28, 2026, on YouTube, after the results came out shortly after 4 p.m. ET. The figures here come from the results release.
Sources
- Alphabet (GOOGL) overview on StockTitan
- Alphabet financials on StockTitan
- Capital expenditures versus operating expenses, StockTitan guide
- Microsoft earnings, StockTitan
- Meta third quarter 2026 earnings, StockTitan
- Alphabet third quarter 2026 results, Form 8-K exhibit 99.1
- Alphabet third quarter 2026 earnings slides
- Alphabet second quarter 2026 results, Form 8-K exhibit 99.1
- Alphabet first quarter 2026 results, Form 8-K exhibit 99.1
- Microsoft fiscal first quarter 2027 results, Form 8-K exhibit 99.1
- Meta third quarter 2026 results, Form 8-K exhibit 99.1
- Alphabet second quarter 2026 earnings call, webcast and transcript
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