Google's cloud business more than doubled its revenue in the July through September quarter, pushing Alphabet's total sales up 25% to $127.6 billion, while net income fell to $26.2 billion from $35.0 billion a year earlier, according to the results Alphabet filed with the SEC after the market closed on Wednesday, October 28.
Where the growth came from
| Measure | July to Sept. 2026 | A year earlier |
|---|---|---|
| Total revenue | $127.6 billion | $102.3 billion |
| Google Cloud revenue | $30.7 billion | $15.2 billion |
| Google Cloud operating income | $11.1 billion | $3.6 billion |
| Google Search and other revenue | $63.4 billion | $56.6 billion |
| YouTube ads revenue | $11.2 billion | $10.3 billion |
| Spending on property and equipment | $51.4 billion | $24.0 billion |
Cloud growth sped up again. In the April through June quarter, Google Cloud revenue rose 82% to $24.8 billion; this quarter the increase was 103%. Alphabet credited demand for its AI infrastructure and AI products for businesses, and said sales of its TPU systems also added to revenue.
The larger Google Services business, which includes Search and YouTube, grew 11% to $96.3 billion, slower than the 15% it reported for the previous quarter. Chief Executive Sundar Pichai said in the release that year-over-year growth in search queries is the highest it has been in five years, and that the Gemini app has reached one billion users.
Why profit fell
Operating income, which measures the core business, rose 30% to $40.6 billion. The drop in net income came from investments: Alphabet recorded an $8.7 billion loss on equity securities this quarter, which cut net income by $6.7 billion. A year earlier, other income added $12.8 billion. Earnings per share fell to $2.12 from $2.87.
Paying for the build-out
Alphabet spent $51.4 billion on property and equipment in the quarter, more than its operating cash flow, leaving free cash flow at negative $9.1 billion. It also raised money by selling stock: 12 million Class A shares for $4.3 billion and 24 million Class C shares for $8.1 billion under an at-the-market program, with $27.6 billion still available for future sales.
