This article first appeared on GuruFocus.
Revenue: $119.8 billion, up 24% year over year.
Google Services Revenue: $94.5 billion, up 15% year over year.
Cloud Revenue: $24.8 billion, up 82% year over year.
Operating Income: $40.8 billion, with an operating margin of 34%.
Net Income: Increased significantly due to unrealized gains in equity securities.
Operating Cash Flow: $39.1 billion for the quarter.
CapEx: $44.9 billion, primarily in technical infrastructure.
Free Cash Flow: Negative $5.9 billion for the quarter.
Cash and Marketable Securities: $242.5 billion.
Long-term Debt: $98.2 billion.
Google Search and Other Advertising Revenue: $63.3 billion, up 17% year over year.
YouTube Advertising Revenue: $11.1 billion, up 13% year over year.
Google Cloud Backlog: $514 billion, increased by more than $50 billion sequentially.
Other Bets Revenue: $382 million, with an operating loss of $1.8 billion.
Release Date: July 22, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Alphabet Inc (NASDAQ:GOOG) reported a 24% year-over-year revenue growth, showcasing strong financial performance.
Cloud revenue surged by 82%, driven by high demand for AI infrastructure and solutions, with a backlog reaching $514 billion.
The company launched new AI models, such as Gemini 3.6 Flash and 3.5 Flash Lite, which are cost-effective and efficient, indicating strong innovation in AI.
YouTube advertising revenues grew by 13%, highlighting the platform’s continued appeal to advertisers.
Google Services revenues increased by 15%, with significant contributions from Search and YouTube, demonstrating robust growth across key segments.
Negative Points
Total operating expenses rose by 27%, driven by increased R&D and marketing expenses, which could impact profitability.
Negative free cash flow of $5.9 billion was reported in the second quarter, primarily due to high capital expenditures.
The company faces supply constraints, particularly in AI infrastructure, which may limit growth potential in the near term.
Network advertising revenues declined by 1% year-over-year, indicating challenges in this segment.
The operating loss in Alphabet’s ‘Other Bets’ segment was $1.8 billion, reflecting ongoing investments in areas like Waymo that are not yet profitable.
Q & A Highlights
Q: Sundar, with more time and gen AI products and tools in the market, can you give us some perspective on how your view on the size of the overall gen AI ROIC opportunity and the timing of the ROIC has changed now versus one year ago? A: Sundar Pichai, CEO: We are in the early stages of a secular shift across multiple areas. The possibilities with frontier capabilities are vast, and there’s a lot of work ahead to translate these into consumer experiences. On the enterprise side, demand is strong, and many companies are just beginning to explore what’s possible. We are more bullish on the opportunities ahead.
