Alphabet's third-quarter revenue rises 25% to $127.6 billion while net income falls 24%

Written by Claude Sonnet 5.5, an AI model, from public records. Each figure in it was checked automatically against the source's text or our database before it was published.

Alphabet took in $127.58 billion in revenue, what it earned from selling, in the quarter ended Sep 30, 2026, up 24.7% from $102.35 billion a year earlier. Operating income, what is left after the costs of running the business, rose 29.9% to $40.58 billion from $31.23 billion. Net income, what is left after interest, tax and everything else, fell 24.3% to $26.47 billion from $34.98 billion. Alphabet announced the results on Oct 28 and filed its Form 10-Q, a quarterly report to the US Securities and Exchange Commission, on Oct 29.1^,2^,3^,4^,5^,6^,7^,8^,9^,10^,11

Alphabet reports in segments, parts of the company reported on their own. Google Services brought in $96.3 billion, up 10.6% and equal to 75.5% of the filing's total revenue. Google Cloud brought in $30.71 billion, up 102.6%, and its share of total revenue rose to 24.1% from 14.8% a year earlier. A third line, Other Operating Segment, is $372 million. The filing's total also includes $194 million of hedging gains related to revenue, not allocated to segments. The table also shows the lines inside Google Services, which its $96.3 billion already includes.12^,13^,14^,15^,16^,17^,18^,19^,20^,21^,22^,23

The annual report says Google Services generates revenue primarily by delivering advertising on Google Search & other properties, YouTube and Google Network partners' properties. Google Search & other brought in $63.35 billion, up $6.8 billion, and the company says interrelated factors drove the growth, including more search queries from growth in user adoption and usage on mobile devices, growth in advertiser spending, and improvements in ad formats and delivery. Within Google Services, subscriptions, platforms and devices brought in $14.29 billion, up $1.4 billion, and the company says the growth was primarily driven by subscriptions and devices.24^,25^,26^,27^,28^,29^,30

Google Cloud added $15.6 billion of revenue, and the company says the increase was primarily driven by growth in Google Cloud Platform, largely from infrastructure and platform services, and TPU system sales. The annual report says Google Cloud generates revenue primarily from consumption-based fees and subscriptions for infrastructure, platform, applications and other cloud services. The 10-Q says Google Cloud Platform's services provide access to solutions such as AI offerings including enterprise AI infrastructure, the Vertex AI platform and Gemini Enterprise.31^,32^,33^,34

Counted by customers' addresses, the United States grew most: $67.68 billion, up 38.8%, or 53.1% of revenue against 47.6% a year earlier. Every other region grew less, from 9.3% in EMEA (Europe, the Middle East and Africa) to 17.1% in Other Americas (Canada and Latin America).35^,36^,37^,38^,39^,40^,41^,42^,43

Margins are the part of revenue left as profit: operating income was 31.8 cents of each dollar of revenue, against 30.5 cents a year earlier, and net income was 20.7 cents, against 34.2 cents. General and administrative expenses dropped $1.3 billion, which the company ties primarily to a $2.1 billion decrease in expenses related to legal and other matters, largely reflecting the effect of a $3.5 billion fine from the European Commission accrued in the third quarter of 2025. Certain costs the company does not allocate to a segment, called Alphabet-level activities, were an operating loss of $7.66 billion, against $4.47 billion a year earlier, and primarily reflect expenses related to its shared AI research and development.44^,45^,46^,47^,48^,49^,50^,51^,52

The gap between the margins sits below operating income, where other income (expense), net, went from a $12.76 billion gain to an $8.22 billion loss. The company says that $21.0 billion decrease was primarily related to net unrealized losses (drops in value on holdings not yet sold) in marketable equity securities, largely from SpaceX, and to decreased net unrealized gains on nonmarketable equity securities, largely from a private company. The earnings release says an $8.7 billion loss on equity securities cut net income by $6.7 billion and the tax provision by $1.9 billion. The release states net income available to common stockholders, $26.17 billion, after $298 million of preferred stock dividends.53^,54^,55^,56^,57

In its Oct 29 filing, Alphabet says it spent $132.0 billion on capital expenditures in the first nine months of 2026, against $63.6 billion a year earlier, and expects to increase its 2026 investment in technical infrastructure, including servers, network equipment and data centers, significantly relative to 2025. Its revenue backlog, commitments in customer contracts not yet recognized as revenue, was $567.7 billion at Sep 30, 2026, $560.8 billion of it related to Google Cloud; it expects to recognize just over 55% of the backlog as revenue over the next 24 months.11^,58^,59^,60^,61

Our records hold the 10-Q's discussion and notes, not its other exhibits, and cannot tell whether year-earlier figures were restated. The discussion and notes we hold give no reason for the growth in United States revenue.62^,63