Alphabet: 26Q3 Cloud Revenue Up 103% YoY, but Overall Results Miss Expectations

Google's parent company Alphabet released its financial results for the third quarter of 2026. The report shows that Alphabet achieved revenue of $127.577 billion in the third quarter, up 25% YoY, below the market expectation of $128.2 billion; Non-GAAP net income was $26.170 billion, down 34% YoY; diluted earnings per share (EPS) was $2.12, below the market expectation of $3.02. By business segment, in the third quarter, Google Cloud growth accelerated, with revenue surging 103% YoY to $30.71 billion. Google's advertising business revenue was $82.01 billion, up 11% YoY; among which Google Search revenue was $63.35 billion, up 12% YoY, with a slower growth rate. In terms of capital expenditure, Google's third-quarter capital expenditure reached $51.36 billion, below the market expectation of $55.1 billion. The company maintained its 2026 capital expenditure guidance unchanged, which was raised to $195 billion to $205 billion in the second quarter. Alphabet also said on its earnings call that it expects capital expenditure to increase significantly in 2027. In terms of cash flow, the company's third-quarter free cash flow was negative $9.07 billion, marking two consecutive quarters of negative free cash flow.