Alphabet — 2026Q3 earnings
reported 2026-07-22
EPS $9.11 vs $2.90 est — beat
next session -7.1% (close 2026-07-22 → 2026-07-23)
Source
8-K filing ↗Summary
A blowout growth quarter: consolidated revenue rose 24% to $119.8 billion — a 12th straight double-digit quarter — with Google Cloud accelerating to 82% growth and $24.8 billion on enterprise AI demand, while Services kept compounding at 15%. The 294% EPS surge to $9.11 was largely non-operating, driven by a $98.0 billion other-income gain that was mostly unrealized equity-securities gains, and Alphabet raised $49.6 billion of fresh equity in June aimed partly at scaling AI infrastructure capex. Sundar Pichai framed the quarter as AI-led everywhere: Cloud backlog reached $514 billion, API token throughput jumped from 16 to 22 billion tokens per minute in a single quarter, and the company remains supply constrained on model demand.
Earnings call
Review
From the report
A blowout growth quarter: consolidated revenue rose 24% to $119.8 billion (a 12th straight double-digit quarter) with Google Cloud accelerating to 82% growth on enterprise AI demand, while the 294% EPS surge to $9.11 was largely non-operating (a $98.0 billion other-income gain, mostly unrealized equity-securities gains); Alphabet paired the results with a $49.6 billion equity raise aimed partly at scaling AI infrastructure capex.
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Top-line growth accelerated: consolidated revenues rose 24% year over year (23% in constant currency) to $119.8 billion, Alphabet's 12th consecutive quarter of double-digit revenue growth. show quote
“Consolidated Alphabet revenues increased 24%, or 23% in constant currency, to $119.8 billion, reflecting strong performance across the business and our 12th consecutive quarter of double-digit revenue growth.”
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Google Cloud was the standout, accelerating to 82% growth and $24.8 billion of revenue, led by GCP demand for enterprise AI Solutions and enterprise AI Infrastructure. show quote
“Google Cloud saw a meaningful acceleration in growth as revenues increased 82% to $24.8 billion, led by an increase in Google Cloud Platform (GCP) across enterprise AI Solutions and enterprise AI Infrastructure, as well as core GCP services.”
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The core ads-and-services franchise kept compounding: Google Services grew 15% to $94.5 billion, with Google Search & other up 17% and YouTube ads up 13%. show quote
“Google Services revenues increased 15% to $94.5 billion, led by 17% growth in Google Search & other, 15% in Google subscriptions, platforms, and devices, and 13% in YouTube ads.”
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Headline profitability surged, with net income up 298% and EPS up 294% to $9.11. show quote
“Net income available to common stockholders increased 298% and EPS increased 294% to $9.11.”
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Alphabet is funding its AI buildout with fresh capital: in June it raised $49.6 billion of net proceeds from common stock plus mandatory convertible preferred stock, earmarked for purposes including capital expenditures to scale AI infrastructure and global compute. show quote
“In June 2026, we issued a combination of Class A stock and Class C stock and mandatory convertible preferred stock for aggregate net proceeds of $49.6 billion, to be used for general corporate purposes, including capital expenditures to scale AI infrastructure and global compute.”
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The release attributes the bulk of the surge to non-operating items: a $98.0 billion net gain in other income, primarily unrealized gains on equity securities. show quote
“Other income reflected a net gain of $98.0 billion, primarily the result of net unrealized gains on our equity securities.”
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From the call
Sundar Pichai framed the quarter as AI-led across every surface: Cloud grew 82% with backlog reaching $514 billion, model demand keeps Alphabet supply constrained, and API token throughput rose from 16 to 22 billion tokens per minute in a quarter.
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Sundar Pichai said Cloud grew 82% on AI infrastructure demand, with backlog reaching $514 billion. show quote
“Cloud revenue grew 82%, powered by strong demand for AI infrastructure and AI solutions. And Cloud backlog grew to $514 billion.”
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Pichai described Alphabet as supply constrained on model demand. show quote
“Demand for our models is translating to strong token usage across developers and enterprise customers, and we continue to be supply constrained, a sign of momentum and rapid adoption.”
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Model API throughput rose from 16 to 22 billion tokens per minute quarter over quarter. show quote
“Our model APIs are now processing approximately 22 billion tokens per minute. That's up from 16 billion just a quarter ago.”
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as of 2026-08-10