Alphabet's revenue jumps 25% to $127.6B in Q3

By Gokhan Ergocun

ISTANBUL (AA) - US technology firm Alphabet, Google's parent company, reported Wednesday that its revenue rose 25% year-on-year to $127.6 billion in the July-September quarter, driven by strong growth in its cloud computing business.

The company said in its financial results for the third quarter of 2026 that revenue increased from $102.3 billion in the same period last year, marking its 13th consecutive quarter of double-digit growth.

Operating income climbed 30% to $40.6 billion from $31.2 billion a year earlier, while its operating margin reached 31.8%, according to the company's statement.

However, net income declined to $26.5 billion from approximately $35 billion in the same quarter last year.

Net income available to common shareholders fell to $26.2 billion from $35 billion, while diluted earnings per share decreased to $2.12 from $2.87.

Alphabet reported a net loss of $8.2 billion in other income and expenses, compared with a gain of $12.8 billion a year earlier.

The company said losses on equity securities totaled $8.7 billion during the quarter, reducing net income by $6.7 billion after taxes.

Google Cloud revenue surged 103% to $30.7 billion from $15.2 billion a year earlier, supported by demand for artificial intelligence infrastructure, AI solutions and its core cloud services.

The cloud division's operating income jumped to $11.1 billion from $3.6 billion in the corresponding period last year.

Google Services revenue increased 11% to $96.3 billion, driven by growth in search, advertising and subscription services.

Revenue from Google Search and other services rose 12% to $63.4 billion, while YouTube advertising revenue reached $11.2 billion, up from $10.3 billion a year earlier.

Google subscriptions, platforms and devices revenue increased to $14.3 billion from $12.9 billion, the company said.

Alphabet CEO Sundar Pichai said the company was benefiting from growing demand for its artificial intelligence products and services.

"We had a strong quarter and are now on a half-trillion dollar revenue run rate. Our deep full stack approach is driving momentum across the business, with Alphabet revenues growing 25% year-over year," Pichai said.

"Our AI investments are driving overall Search query growth, including commercial queries. In fact, our year-over-year query growth rate is the highest it's been in the last five years," he added.

Pichai said Google Cloud's performance was supported by demand for its AI infrastructure, AI solutions and tensor processing unit systems.

He also announced that the Gemini app had reached 1 billion users, describing it as the fastest-growing product in Google's history.

The company's first-party AI models were processing nearly 32 billion tokens per minute through application programming interfaces, more than four times the level recorded a year earlier, Pichai said.

He added that YouTube Music and Premium had surpassed 150 million subscribers globally, including trial users.

Meanwhile, Alphabet's Other Bets segment reported revenue of $372 million, compared with $344 million a year earlier, while its operating loss widened to $2 billion.

Gökhan Ergöçün