Alphabet (GOOG) Q1 2026 earnings summary

Executive summary

• Revenue for Q1 2026 rose 22% year-over-year to $109.9 billion, marking the 11th consecutive quarter of double-digit growth, driven by strong performance in Google Services and Cloud.

• Net income surged 81% to $62.6 billion, with EPS up 82% to $5.11, supported by strong operating performance and unrealized gains in equity securities.

• Operating income increased 30% to $39.7 billion, with operating margin expanding to 36.1%.

• AI investments and full-stack approach fueled growth across Search, Cloud, and subscriptions, with paid subscriptions reaching 350 million and Gemini AI models driving record demand.

• Major acquisitions included Wiz ($29.5B) and Intersect ($5.9B), and Waymo surpassed 500,000 autonomous rides per week.

Financial highlights

• Google Services revenue increased 16% to $89.6 billion, led by Search (+19%), subscriptions/platforms/devices (+19%), and YouTube ads (+11%).

• Google Cloud revenue surged 63% to $20.0 billion, with backlog nearly doubling to over $460 billion.

• Operating cash flow was $45.8 billion; free cash flow for the quarter was $10.1 billion.

• Other income (expense), net, was $37.7 billion, mainly from unrealized gains on equity securities.

• Ended quarter with $126.8 billion in cash and marketable securities; long-term debt rose to $79.1 billion after new note issuances.

Outlook and guidance

• CapEx guidance for 2026 raised to $180–$190 billion, reflecting increased AI infrastructure investment and recent acquisitions.

• Revenue backlog stands at $467.6 billion, with over 50% expected to be recognized in the next 24 months, mainly from Cloud.

• 2027 CapEx expected to significantly increase to support unprecedented AI compute demand.

• FX tailwind of ~1 percentage point expected in Q2 revenue.

• Management highlights momentum in Gemini Enterprise and consumer AI plans, with strong adoption and usage.