Alphabet revenue rises 25% as cloud surges and Search growth slows

AI · First reported 29 Oct, 01:15 · Updated 16:13

Image: Wikimedia Commons · NASA Johnson Space Center · Public domain

Alphabet reported $127.6 billion in third-quarter revenue, with Google Cloud revenue more than doubling year over year. Search revenue continued to grow but at a slower rate, while the company reported a second consecutive quarter of negative free cash flow as it invests in AI infrastructure.

Revenue for the quarter ended September 30, 2026, rose 25% year over year to $127.6 billion; operating income increased 30% to $40.6 billion.
Google Cloud revenue more than doubled to $30.7 billion, supported by demand for AI infrastructure, enterprise AI products and core cloud services. Its backlog reached $561 billion.
Google Search and other revenue grew 12% to $63.4 billion, down from 17% growth in the prior quarter. Alphabet’s total advertising revenue was $82 billion, below analysts’ expected $83.4 billion.
The Gemini app passed one billion users, and Alphabet said its first-party model APIs processed nearly 32 billion tokens per minute.
Free cash flow was negative $9.1 billion, following negative $5.9 billion in the previous quarter. Alphabet forecast 2026 capital expenditure of $195 billion to $205 billion and said spending would increase substantially in 2027.