Google Q3 cloud revenue surges 103% to record; net profit falls 25%, shares drop nearly 10% after hours

Shenchao TechFlow reports that on October 29, Alphabet released its Q3 2026 earnings in the early hours of October 29 Beijing time. Revenue for the quarter was USD 127.6 billion, up 25% year over year, marking the 13th consecutive quarter of double-digit growth. The annualized revenue run rate reached USD 500 billion, but was slightly below Wall Street expectations. Google Cloud revenue rose 103% year over year to USD 30.7 billion, a record increase, mainly driven by demand for enterprise AI infrastructure, AI solutions and TPU-related businesses, with growth accelerating from 82% in Q2. Google Services revenue grew 11% to USD 96.3 billion, including a 12% increase in search and other advertising revenue and a roughly 9% rise in YouTube advertising revenue to USD 11.2 billion; the growth rate of search queries was the highest in nearly five years.

On the profitability front, net income attributable to common stockholders was USD 26.2 billion, down about 25% year over year, with earnings per share of USD 2.12. The decline was mainly due to a loss of about USD 8.7 billion on equity securities investments, compared with a larger gain in the same period last year. Operating income rose 30% year over year to USD 40.6 billion, and operating margin improved to 31.8%. The company maintained its full-year capital expenditures guidance of USD 195 billion to USD 205 billion, while free cash flow was negative for the quarter. After the earnings release, Alphabet shares fell 9.84% in after-hours trading, as the market worried about revenue and profit slightly missing expectations, slower advertising growth and cash flow pressure from heavy capital expenditures.

Source: Shenchao TechFlow