Alphabet Q3: Google Cloud Revenue More Than Doubles as Total Sales Rise 25%

Alphabet's cloud business more than doubled its revenue in the third quarter, lifting total sales 25% to $127.6 billion, even as a swing in investment results and a record spending pace pulled earnings per share and free cash flow lower.

Google Cloud revenue jumped 103% to $30.7 billion from $15.2 billion a year earlier, the Google and YouTube parent said in its earnings release filed with an 8-K on Wednesday. The company called it "record growth" and said sales of its TPU systems were "a meaningful contributor" to the quarter's revenue gain.

A half-trillion-dollar run rate

"We had a strong quarter and are now on a half-trillion dollar revenue run rate," CEO Sundar Pichai said in the release. He said the company's AI investments are driving Search query growth, including commercial queries, and that year-over-year query growth is the highest it has been in five years.

Pichai also said the Gemini app has reached one billion users, which he called the fastest-growing product in Google's history, and that first-party model APIs are now processing nearly 32 billion tokens per minute, more than four times the level of a year ago.

It was the company's 13th consecutive quarter of double-digit revenue growth, according to the release.

Search grows, cloud profits soar

Google Services revenue rose 11% to $96.3 billion. Within it, Google Search and other climbed 12% to $63.4 billion, YouTube ads rose to $11.2 billion from $10.3 billion, and subscriptions, platforms and devices grew to $14.3 billion from $12.9 billion.

Google Cloud's operating income tripled to $11.1 billion from $3.6 billion. Google Services earned $39.2 billion, while Other Bets lost $2.0 billion and Alphabet-level activities, mainly shared AI research and development, cost $7.7 billion.

Consolidated operating income rose 30% to $40.6 billion, and operating margin was 31.8%.

Why EPS fell

The bottom line moved the other way. Other income swung to a net expense of $8.2 billion from a $12.8 billion gain a year earlier, reflecting a $9.0 billion net loss on debt and equity securities in the cash flow statement. Net income available to common stockholders fell to $26.2 billion from $35.0 billion, and diluted EPS dropped to $2.12 from $2.87.

Spending, funding and dividends

Purchases of property and equipment more than doubled to $51.4 billion from $24.0 billion. With operating cash flow of $42.3 billion, free cash flow was negative $9.1 billion for the quarter, though positive $19.7 billion on a trailing 12-month basis.

To help fund that build-out, Alphabet issued 12 million Class A shares and 24 million Class C shares through its at-the-market program for net proceeds of $12.4 billion combined, and sold senior unsecured notes for net proceeds of $28.7 billion. It made no stock repurchases in the quarter, compared with $11.5 billion a year earlier. It had $265.1 billion in cash and marketable securities at quarter-end and long-term debt of $125.1 billion.

The board declared a quarterly dividend of $0.22 per share on Class A, B and C stock, payable Dec. 14 to holders of record on Dec. 7, plus $15.63 per share on its Series A and Series B mandatory convertible preferred stock.

Headcount rose to 204,757 from 190,167 a year earlier.

Sources

1. Alphabet Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 28, 2026 (accession 0001652044-26-000080)

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