Key Highlights

  • Diluted EPS of USD 2.12 fell from USD 2.87 a year earlier and trailed the USD 3.01 consensus estimate.
  • Revenue grew 25% to USD 127.6 billion, slightly under the USD 127.97 billion consensus estimate for the quarter.
  • Google Cloud revenue surged 103% to USD 30.7 billion, with operating income rising to USD 11.1 billion.
  • Capital spending reached USD 51.4 billion, leaving free cash flow negative at USD 9.1 billion for the quarter.

Alphabet Inc. (NASDAQ:GOOG) reported third-quarter 2026 revenue of USD 127.6 billion, up 25% from USD 102.3 billion and just under a consensus estimate of USD 127.97 billion. Diluted earnings per share were USD 2.12, down from USD 2.87 a year earlier and well below a consensus estimate of USD 3.01. Net income available to common stockholders was USD 26.2 billion versus USD 35.0 billion.

Operating income rose 30% to USD 40.6 billion for a 31.8% margin, so the earnings decline came from below the operating line. Other income swung to a net expense of USD 8.2 billion from income of USD 12.8 billion, driven by a USD 8.7 billion loss on equity securities. The company said that loss reduced diluted EPS by USD 0.55, a per-share effect the company stated separately in its other income footnote.

Cloud, Search and Segment Detail

Google Services revenue increased 11% to USD 96.3 billion, led by a 12% rise in Search and other revenue to USD 63.4 billion. CEO Sundar Pichai said Search query growth was the highest in five years and that AI investments are supporting commercial queries. YouTube ads reached USD 11.2 billion, and subscriptions, platforms and devices reached USD 14.3 billion. Google Services operating income was USD 39.2 billion.

Google Cloud revenue more than doubled to USD 30.7 billion from USD 15.2 billion, with TPU system sales cited as a meaningful contributor, and its operating income tripled to USD 11.1 billion from USD 3.6 billion. Other Bets posted an operating loss of USD 2.0 billion, and Alphabet-level activities, which mainly hold shared AI research costs, reached USD 7.7 billion of expense versus USD 4.5 billion a year ago.

Capital Intensity, Funding and Risk Factors

Purchases of property and equipment more than doubled to USD 51.4 billion from USD 24.0 billion, while operating cash flow slipped to USD 42.3 billion from USD 48.4 billion. Free cash flow was negative USD 9.1 billion for the quarter, and trailing twelve-month free cash flow stood at USD 19.7 billion. No stock repurchases occurred in the quarter, compared with USD 11.5 billion a year earlier.

The company funded the build-out with new capital. It issued senior unsecured notes for net proceeds of USD 28.7 billion and sold Class A and Class C shares through its at-the-market program for USD 12.4 billion combined, leaving USD 27.6 billion of capacity. Long-term debt reached USD 125.1 billion from USD 46.5 billion at year end. The release gave no numerical guidance and noted that equity investment values can add volatility to other income.

Signposts Ahead

Four readings frame the next report. Cloud is the first: revenue of USD 30.7 billion and an operating margin of about 36%. Capital spending is the second, at USD 51.4 billion for the quarter and USD 132.0 billion year to date. The third is the balance sheet, with USD 265.1 billion of cash and marketable securities against USD 125.1 billion of long-term debt. The fourth is shareholder returns: the board declared a USD 0.22 quarterly common dividend payable December 14, 2026 to holders of record on December 7, with no buybacks in the third quarter.