On July 22, 2026, Alphabet announced results for the quarter ended June 30, 2026. Consolidated revenues rose 24 percent year over year to $119.796 billion, the twelfth consecutive quarter of double-digit revenue growth. Google Cloud was the standout: revenues increased 82 percent to $24.768 billion, and Cloud segment operating income more than tripled to $8.814 billion from $2.826 billion a year earlier. Consolidated operating income rose 30 percent to $40.770 billion and operating margin expanded two points to 34 percent.
The headline earnings number was distorted by investments rather than operations. Other income, net was $97.983 billion, driven by a $99.031 billion net gain on equity securities, which lifted net income to $112.107 billion and diluted EPS to $9.11, up 294 percent. Alphabet disclosed that the equity gain alone added $6.26 to diluted EPS.
The operating story is the spending. Purchases of property and equipment reached $44.924 billion in the quarter, double the $22.446 billion of Q2 2025, and $132.402 billion on a trailing-twelve-month basis. That was enough to push quarterly free cash flow to negative $5.855 billion against $39.069 billion of operating cash flow. Alphabet also noted that in June 2026 it raised aggregate net proceeds of $49.6 billion from a combined common and mandatory convertible preferred stock issuance, explicitly earmarked in part for “capital expenditures to scale AI infrastructure and global compute,” plus $20.3 billion of senior unsecured notes issued during the quarter.
Sundar Pichai said “Our AI investments are redefining what’s possible across every part of our business,” citing Gemini models processing 22 billion API tokens per minute, 950 million monthly active users on the Gemini App, and nearly 90 percent of the Fortune 100 using Gemini Enterprise. The signal for the AI economy is blunt: one of the most cash-generative companies in history is now consuming more cash than it produces in a quarter in order to build AI capacity, and is raising equity and debt to fund the gap.