Alphabet Q3 2026 earnings review
Quarter ended September 30, 2026
For information only, not investment advice. No rating or price target.
Earnings reviews · 21 slides
Not investment advice; no rating or price target.
1 · Cover · Open this slide in DeepCell
Q3 revenue and EPS missed consensus, while Google Cloud revenue beat
- 1.Alphabet missed the LSEG consensus on Q3 revenue and EPS
- 2.Google Cloud revenue rose 102.6% and beat the LSEG estimate
- 3.GAAP net income fell as other income turned to a loss on equity securities
- 4.Capex exceeded operating cash flow, so free cash flow was negative
- 5.Shares fell about 10% in after-hours trading after the release
Note: Adjusted diluted EPS is GAAP diluted EPS plus the per-share effect of the equity-securities loss. Free cash flow is operating cash flow less purchases of property and equipment. The share move is the after-hours price at 8:00 PM ET on Oct 28 against the Oct 28 close.Source: Alphabet Form 8-K, Oct 28, 2026; LSEG via CNBC and Reuters, Public.com, Oct 28, 2026; analysis of company data
2 · Key takeaways · Open this slide in DeepCell
Q3 EPS came in 11.6% below the LSEG consensus, while Google Cloud revenue beat by 3.9%
Q3 2026 results vs consensus
| Metric | Actual | Consensus | Variance | Variance, % | Result |
|---|---|---|---|---|---|
| EPS (LSEG basis) | $2.67 | $3.02 | -$0.35 | -11.6% | Miss |
| Revenue | $127.58B | $128.22B | -$0.64B | -0.5% | Miss |
| Google Cloud revenue | $30.71B | $29.57B | +$1.14B | +3.9% | Beat |
| Operating income (FactSet) | $40.58B | $43.19B | -$2.61B | -6.1% | Miss |
Share price reaction to the after-the-close release on Oct 28, 2026
| $ per share, Oct 28 (ET) | Close, 4:00 PM | After hours, 8:00 PM | Change |
|---|---|---|---|
| GOOGL share price | $325.61 | $292.50 | -10.2% |
Note: Adjusted diluted EPS is GAAP diluted EPS plus the per-share effect of the equity-securities loss. LSEG consensus uses adjusted diluted EPS. Variance is actual less consensus. EDGAR accepted the 8-K at 4:01 PM ET. After-hours trading is thin. Yahoo Finance shows an Oct 28 close of $324.89.Source: Alphabet Form 8-K, Oct 28, 2026; LSEG and FactSet via CNBC and Reuters, Public.com, Yahoo Finance, Oct 28, 2026; analysis of company data
3 · Q3 versus Wall Street consensus · Open this slide in DeepCell
Operating income rose 29.9%, but net income fell 25.2% on an equity-securities loss
- Google Cloud led revenue growthGoogle Cloud revenue rose 102.6%, against 10.6% for Google Services.
- Other income turned negativeOther income (expense), net moved from $12,759M to ($8,221M).
Key figures in $M and YoY % for Q3 2026 vs Q3 2025
| Metric | Q3 2025 | Q3 2026 | YoY |
|---|---|---|---|
| Revenue | $102,346M | $127,577M | +24.7% |
| Operating income | $31,228M | $40,576M | +29.9% |
| Net income | $34,979M | $26,170M | -25.2% |
| Diluted EPS | $2.87 | $2.12 | -26.1% |
| Free cash flow | $24,461M | -$9,065M | n.m. |
Note: Free cash flow is operating cash flow less purchases of property and equipment. n.m. means not meaningful. Free cash flow was negative in Q3 2026. Red figures are unfavourable changes.Source: Alphabet Form 8-K, Oct 28, 2026; analysis of company data
4 · Q3 at a glance · Open this slide in DeepCell
Google Cloud revenue rose 102.6% and its operating income tripled, while Other Bets operating loss widened 43.5%
Segment revenue, operating income and operating margin
$M unless noted, Q3 2025 vs Q3 2026
| Revenue | Operating income | Margin | |||||
|---|---|---|---|---|---|---|---|
| Segment | Q3 2025 | Q3 2026 | YoY | Q3 2025 | Q3 2026 | YoY | Q3 2026 |
| Google Services | $87,052M | $96,302M | +10.6% | $33,527M | $39,157M | +16.8% | 40.7% |
| Google Cloud | $15,157M | $30,709M | +102.6% | $3,594M | $11,121M | +209.4% | 36.2% |
| Other Bets | $344M | $372M | +8.1% | -$1,426M | -$2,047M | n.m. | n.m. |
| Alphabet-level activities | — | — | n.a. | -$4,467M | -$7,655M | n.m. | n.a. |
| Hedging gains (losses) | -$207M | $194M | n.m. | n.a. | n.a. | n.a. | n.a. |
| Alphabet | $102,346M | $127,577M | +24.7% | $31,228M | $40,576M | +29.9% | 31.8% |
Google Cloud revenue backlog reached $560.80B at Sep 30
Note: Operating margin is segment operating income divided by segment revenue. Alphabet-level activities are costs not allocated to segments. Revenue backlog is remaining performance obligations.Source: Alphabet Form 8-K, Oct 28, 2026, Segment Results; Alphabet Form 10-Q, Oct 29, 2026, Revenue Backlog; analysis of company data
5 · Segment overview · Open this slide in DeepCell
Google Cloud accounted for 61.6% of the revenue increase, ahead of Google Services
Google Services revenue rose $9,250M, the second-largest contribution
Revenue change by segment
$M, Q3 2026 vs Q3 2025
Note: Share of the increase is the Google Cloud revenue change divided by the total revenue change. Hedging gains (losses) are not allocated to segments.Source: Alphabet Form 8-K, Oct 28, 2026; analysis of company data
6 · Where revenue growth came from · Open this slide in DeepCell
Google Cloud rose to 24.1% of revenue, up from 14.8% a year earlier
Google Cloud share of total revenue
% of revenue, Q3 2025 vs Q3 2026
Google Cloud operating income rose by 48.4% of each added revenue dollar
Note: Google Cloud share is Google Cloud revenue divided by total revenue. Incremental operating margin is the YoY change in Google Cloud operating income divided by the YoY change in Google Cloud revenue.Source: Alphabet Form 8-K, Oct 28, 2026; Alphabet Form 10-Q, Oct 29, 2026; analysis of company data
7 · Google Cloud share of revenue · Open this slide in DeepCell
Search & other revenue rose 12.0%, faster than YouTube ads and Google Network
Note: TAC is traffic acquisition costs. The TAC rate is the rate stated in the 10-Q.Source: Alphabet Form 8-K, Oct 28, 2026; Alphabet Form 10-Q, Oct 29, 2026; analysis of company data
8 · Google Services revenue lines · Open this slide in DeepCell
Net income fell 25.2% as other income turned to a $8,221M loss
Note: The bridge shows income tax and preferred dividends as reductions. A lower tax provision adds to net income.Source: Alphabet Form 8-K, Oct 28, 2026; analysis of company data
9 · Net income bridge · Open this slide in DeepCell
Google Cloud operating margin rose to 36.2%, while Alphabet’s operating margin rose to 31.8%
Operating margin by segment
% of revenue, Q3 2025 vs Q3 2026
Google ServicesGoogle CloudAlphabet
Google Cloud operating margin was 23.7% a year earlier
Note: Operating margin is operating income divided by revenue. Alphabet-level activities are costs not allocated to segments.Source: Alphabet Form 8-K, Oct 28, 2026; Alphabet Form 10-Q, Oct 29, 2026; analysis of company data
10 · Margins · Open this slide in DeepCell
Free cash flow was ($9,065M), as capex of $51,355M exceeded operating cash flow
Operating cash flow to free cash flow
$M, Q3 2026
Free cash flow was $24,461M in Q3 2025
Note: Free cash flow is operating cash flow less purchases of property and equipment.Source: Alphabet Form 8-K, Oct 28, 2026; CNBC, Oct 28, 2026; analysis of company data
11 · Cash flow · Open this slide in DeepCell
Capex rose 114.4% and reached 40.3% of revenue
Capex as a share of revenue
% of revenue, Q3 2025 vs Q3 2026
Capex came in $3,735M below the estimate CNBC cited
Note: Capex is purchases of property and equipment.Source: Alphabet Form 8-K, Oct 28, 2026; CNBC, Oct 28, 2026; analysis of company data
12 · Capex · Open this slide in DeepCell
Cash and marketable securities rose to $265,098M, while long-term debt rose to $125,102M
Note: ATM is at-the-market. Net cash is cash, cash equivalents and marketable securities less long-term debt. Changes cover the nine months since Dec 31, 2025.Source: Alphabet Form 8-K, Oct 28, 2026; Alphabet Form 10-Q, Oct 29, 2026; analysis of company data
13 · Balance sheet · Open this slide in DeepCell
Alphabet bought back no stock in Q3, after $11,504M a year earlier, while dividends rose 15.7%
Capital returns and external funding
$M, Q3 2025 vs Q3 2026
| Cash flow line | Q3 2025 | Q3 2026 | Change |
|---|---|---|---|
| Repurchases of stock | $11,504M | $0M | -$11,504M |
| Dividend payments, preferred and common | $2,537M | $2,936M | +$399M |
| Proceeds from common stock issuance, net | $0M | $12,371M | +$12,371M |
| Proceeds from debt issuance, net | $6,624M | $28,996M | +$22,372M |
$69.50B of the repurchase authorization remained at Sep 30
Source: Alphabet Form 8-K, Oct 28, 2026; Alphabet Form 10-Q, Oct 29, 2026; analysis of company data
14 · Capital returns · Open this slide in DeepCell
The 2026 capex outlook implies Q4 capex of $63.05B to $73.05B, above Q3’s $51.36B
Note: Implied Q4 capex is the 2026 capex outlook less Jan–Sep 2026 capex. Variance is actual less estimate. The 2026 capex outlook comes from the Oct 28 call via CNBC.Source: Alphabet Form 8-K, Oct 28, 2026; Alphabet Form 10-Q, Oct 29, 2026; CNBC, Oct 28, 2026; analysis of company data
15 · Capex outlook · Open this slide in DeepCell
Q4 estimates depend on Google Cloud growth, capex and equity-securities marks
Indicator
What to watch
Implication
Q3 reading
Google Cloud revenue
Q4 growth slows from the Q3 pace
Q4 Cloud estimates could fall
Google Cloud revenue rose 102.6% YoY
Capex and free cash flow
Q4 capex lands at the top of the implied range
Free cash flow estimates could fall
Free cash flow was an outflow of $9,065M
Equity securities
Marks on equity holdings move again
GAAP EPS estimates could swing
Equity securities lost $8,664M
Note: Implied Q4 capex is the 2026 capex outlook less Jan–Sep 2026 capex. The 2026 capex outlook comes from the Oct 28 call via CNBC.Source: Alphabet Form 8-K, Oct 28, 2026; Alphabet Form 10-Q, Oct 29, 2026; analysis of company data
16 · Risks to estimates · Open this slide in DeepCell
Appendix: supporting analysis for segments and revenue
| Claim | Evidence | Calculation |
|---|---|---|
| Google Cloud operating income grew faster than its revenue | Google Cloud operating income rose 209.4%; Google Cloud operating margin 23.7% to 36.2% | Segment operating income divided by segment revenue |
| Google Services margin rose | Google Services operating income rose 16.8%; operating margin 38.5% to 40.7% | Segment operating income divided by segment revenue |
| Backlog is mostly Google Cloud | Total revenue backlog $567.70B, of which Google Cloud $560.80B | Remaining performance obligations, Sep 30, 2026 |
Source: Alphabet Form 8-K, Oct 28, 2026; Alphabet Form 10-Q, Oct 29, 2026; analysis of company data
17 · Supporting analysis (1/2) · Open this slide in DeepCell
Appendix: supporting analysis for profit, cash and the balance sheet
| Claim | Evidence | Calculation |
|---|---|---|
| The equity-securities loss lowered EPS | Per-share effect $0.55; GAAP diluted EPS $2.12 | As stated in the release |
| Capex exceeded operating cash flow | Capex was 121.4% of operating cash flow in Q3 2026, against 49.5% in Q3 2025 | Capex divided by operating cash flow |
| Inventory rose with TPU system sales | Inventory $2,439M at Dec 31, 2025 to $13,308M at Sep 30, 2026 | Balance sheet comparison; the 10-Q says inventory is mainly TPU-related hardware |
| The EC Android fine was paid | Fine and interest of $5,200M, previously accrued, paid in July 2026 | As stated in the 10-Q |
Source: Alphabet Form 8-K, Oct 28, 2026; Alphabet Form 10-Q, Oct 29, 2026; analysis of company data
18 · Supporting analysis (2/2) · Open this slide in DeepCell
Appendix: income statement and cash flow detail
Cost and tax detail, $M and YoY %
| Line item | Q3 2025 | Q3 2026 | YoY |
|---|---|---|---|
| Cost of revenues | $41,369M | $51,419M | +24.3% |
| Research and development | $15,151M | $20,640M | +36.2% |
| Sales and marketing | $7,205M | $8,804M | +22.2% |
| General and administrative | $7,393M | $6,138M | -17.0% |
| Provision for income taxes | $9,008M | $5,887M | n.m. |
Cash flow detail, $M and YoY %
| Line item | Q3 2025 | Q3 2026 | YoY |
|---|---|---|---|
| Operating cash flow | $48,414M | $42,290M | -12.6% |
| Investing cash flow | -$27,777M | -$71,349M | n.m. |
| Financing cash flow | -$18,383M | $29,437M | n.m. |
Note: n.m. means not meaningful. Red figures are unfavourable changes.Source: Alphabet Form 8-K, Oct 28, 2026; analysis of company data
19 · Appendix: financial detail · Open this slide in DeepCell
Appendix: sources
- Filing: Alphabet Form 8-K, Oct 28, 2026 — https://www.sec.gov/Archives/edgar/data/1652044/000165204426000080/googexhibit991q32026.htm
- Filing: Alphabet Form 10-Q, Oct 29, 2026 — https://www.sec.gov/Archives/edgar/data/1652044/000165204426000084/goog-20260930.htm
- Consensus (EPS, revenue: LSEG; operating income: FactSet; Search, capex, free cash flow: unnamed provider) and 2026 capex outlook from the call: CNBC, Oct 28 — https://www.cnbc.com/2026/10/28/alphabet-googl-earnings-q3-2026.html
- Consensus (Google Cloud revenue, LSEG): Reuters via Investing.com, Oct 28 — https://ca.investing.com/news/stock-market-news/alphabets-google-cloud-unit-beats-quarterly-revenue-estimates-on-steady-ai-demand-4910857
- Prices (share price reaction): Public.com after-hours history, read Nov 1 — https://public.com/stocks/googl/after-hours; close cross-checked on Yahoo Finance — https://finance.yahoo.com/quote/GOOGL/
- Release time: EDGAR 8-K acceptance 4:01 PM ET, Oct 28 — https://www.sec.gov/Archives/edgar/data/1652044/000165204426000080/0001652044-26-000080-index.htm
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20 · Sources · Open this slide in DeepCell
Important disclosures and disclaimer
For information only. This presentation is provided for information only. It is not investment, legal, tax or accounting advice, and it is not an offer, or a solicitation of an offer, to buy or sell any security.
No recommendation. It carries no rating, price target or buy, sell or hold view, and it was prepared without regard to any reader's investment objectives, financial situation or needs.
Sources and accuracy. Company figures come from Alphabet's Form 8-K (Exhibit 99.1) and Form 10-Q for the quarter ended September 30, 2026. Consensus estimates (LSEG and FactSet via CNBC and Reuters), the 2026 capex outlook reported from the earnings call, and share prices (Public.com, cross-checked on Yahoo Finance) are third-party data, credited on the sources page. Third-party data has not been independently verified, and no warranty is made that it is accurate, complete or timely.
Forward-looking statements. The capex outlook, consensus estimates and the watch items in this deck are forward-looking. They rest on assumptions that may prove wrong, and actual results may differ materially.
Past performance. Past results and share price moves, including those for Q3 2026, are not a reliable indicator of future results.
Non-GAAP measures. Free cash flow follows Alphabet's own definition, operating cash flow less purchases of property and equipment. The adjusted EPS used for the consensus comparison is the LSEG basis, not an Alphabet measure. Neither replaces GAAP results.
No liability. No liability is accepted for any direct or indirect loss arising from the use of this presentation or its contents.
No affiliation. This presentation is not affiliated with, reviewed or endorsed by Alphabet Inc. or Google LLC and does not represent their views. Company and product names belong to their owners.
How it was made. The deck was built with DeepCell, with figures linked to a model in the file. Readers should check the figures against the original filings and consult a qualified professional adviser before making any investment decision.
Date of analysis. The analysis reflects information available as of November 1, 2026. It will not be updated for later events, and views may change without notice.
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21 · Important disclosures · Open this slide in DeepCell