# Alphabet earnings: Google Cloud revenue doubles to $30.7B

> Revenue rose 25% to $127.6 billion, but free cash flow turned negative on $51.4 billion of capital spending and the stock fell after the close.

URL: https://claudegpt.si/news/alphabet-q3-2026-earnings-cloud-doubles  
Published: 2026-10-28T22:51:58.905Z  
Author: ClaudeGPT Si Newsroom  
Section: AI News  
Topics: Alphabet, Google Cloud, Gemini, Earnings  
Publisher: ClaudeGPT Si

## Key takeaways

- Alphabet's Q3 2026 revenue was $127.6 billion, up 25%, below analyst estimates of $128.2 billion.
- Google Cloud revenue rose 103% to $30.7 billion and Cloud operating income hit $11.1 billion.
- Free cash flow was negative $9.1 billion after $51.4 billion of capital spending.

Alphabet reported third-quarter 2026 results on October 28: revenue of $127.6 billion, up 25%, with Google Cloud revenue more than doubling to $30.7 billion. Even so, Alphabet shares fell in after-hours trading. They closed at $324.89 and were quoted at $292.93 around 6:49 p.m. ET, about 10% lower, according to Yahoo Finance.

The company's [earnings release](https://www.sec.gov/Archives/edgar/data/1652044/000165204426000080/googexhibit991q32026.htm) shows why the stock reacted. Revenue came in below the $128.2 billion analysts expected, per [Techmeme's summary](https://www.techmeme.com/261028/p49#a261028p49) of the release, and net income fell even as operating income rose.

## Cloud doubles, and TPUs start to count

Google Cloud revenue rose 103% to $30.7 billion, from $15.2 billion a year earlier. Its operating income was $11.1 billion, against $3.6 billion. Alphabet says the growth was led by enterprise AI infrastructure and AI solutions, and that sales of TPU systems, its own AI chips, were "a meaningful contributor".

CEO Sundar Pichai said first-party model APIs now process nearly 32 billion tokens per minute, more than four times a year ago, and that the Gemini app has reached one billion users.

## Search grew 12%, YouTube ads missed

Google Search and other revenue was $63.4 billion, up 12%. Alphabet says Search query growth was the highest in five years. YouTube ads brought in $11.2 billion, up 9%, which [Variety reported](https://www.techmeme.com/261028/p50#a261028p50) was below estimates.

## Spending turned free cash flow negative

Purchases of property and equipment were $51.4 billion in the quarter, against $24.0 billion a year earlier. Free cash flow was negative $9.1 billion, after negative $5.9 billion in the second quarter, according to the release's cash flow table.

Net income was $26.2 billion, down from $35.0 billion, or $2.12 per share. Operating income rose 30% to $40.6 billion, but other income swung to a $8.2 billion expense from a $12.8 billion gain a year ago. The release does not explain the swing in its summary.

Alphabet also raised money. It issued $12.4 billion of stock through its at-the-market program (12 million Class A and 24 million Class C shares) and $28.7 billion of senior unsecured notes in the quarter. $27.6 billion remains available under the stock program.

## What to watch

The release gives no guidance. Pichai said on the call, [according to The Information](https://www.theinformation.com/briefings/google-quarterly-revenue-grows-25-falls-short-expectations), that most TPU revenue will arrive in 2027. After-hours prices can move by the open. Alphabet's next dividend, $0.22 per common share, is payable December 14.

Also on October 28, Google launched [Gemini 4 Carbon](https://claudegpt.si/news/gemini-4-carbon-cyber-defenders). Our [Microsoft earnings report](https://claudegpt.si/news/microsoft-q1-fy2027-earnings-azure) covers the other big cloud result of the day.

## Sources

- [Alphabet Announces Third Quarter 2026 Results (8-K exhibit 99.1)](https://www.sec.gov/Archives/edgar/data/1652044/000165204426000080/googexhibit991q32026.htm), Alphabet via SEC EDGAR
- [GOOGL quote](https://finance.yahoo.com/quote/GOOGL/), Yahoo Finance
- [Google Quarterly Revenue Grows 25% But Falls Short of Expectations](https://www.theinformation.com/briefings/google-quarterly-revenue-grows-25-falls-short-expectations), The Information