Alphabet reported third-quarter revenue of $127.6 billion, up 25%, and said the Gemini app has reached one billion users, according to its earnings release. CNBC reported that revenue fell short of the $128.22 billion LSEG estimate and that Alphabet shares fell more than 7% after the report, as of CNBC’s Wednesday evening story.
Google Cloud revenue rose 103% to $30.7 billion, and Cloud operating income was $11.1 billion, up from $3.6 billion a year earlier, the release said. Alphabet said TPU systems sales were also a meaningful contributor to revenue growth. CNBC reported analysts had expected Cloud revenue of $28.7 billion. Google Search and other revenue was $63.35 billion, up 12%, against a $64.96 billion analyst estimate cited by CNBC.
Alphabet’s operating income rose 30% to $40.6 billion, which CNBC said missed a $43.19 billion FactSet forecast. Diluted earnings per share were $2.12, down from $2.87 a year earlier. The release shows other income and expense of negative $8.2 billion, including an $8.7 billion loss on equity securities, which Alphabet said reduced net income by $6.7 billion, or $0.55 per share. CNBC cited an LSEG estimate of $3.02 and said it was unclear whether that figure is comparable.
Free cash flow was negative $9.065 billion, Alphabet’s reconciliation shows: $42.29 billion in operating cash flow less $51.36 billion in capital expenditures, which the release defines as purchases of property and equipment. That compares with negative $5.86 billion in the second quarter. Third-quarter capital spending was up from $23.95 billion a year earlier, and the release shows $131.95 billion for the first nine months of 2026. Reuters reported in July that Chief Financial Officer Anat Ashkenazi projected 2026 capital expenditures of $195 billion to $205 billion.
CEO Sundar Pichai said in the release that the company’s first-party model APIs are processing nearly 32 billion tokens per minute, more than four times a year ago, and that Gemini 4 Argon and Carbon are “now leading at the frontier.” OpenAI brought its frontier models and Codex to Google Cloud on Oct. 22.
Sources
- Alphabet: Alphabet Announces Third Quarter 2026 Results (October 28, 2026; earnings release PDF from Alphabet investor relations, abc.xyz/investor)
- CNBC (Samantha Subin): Alphabet’s free cash flow sinks further, Q3 capex expectations miss in worrying sign for AI trade (October 28, 2026; developing story)
- Reuters: Google increases capex forecast again after cloud-driven quarterly beat (July 22, 2026)