Google reports Q2 2026 revenue of about $119 billion, topping estimates
Alphabet beat revenue and earnings expectations, but a higher 2026 capital spending plan and negative free cash flow sharpened investor focus on the cost of its AI buildout.
Alphabet reported fiscal 2026 second-quarter revenue of $119.8 billion, up 24% from a year earlier and above expectations, with GAAP operating profit rising 30% to $40.8 billion and operating margin improving to 34%. Google Cloud revenue reached $24.8 billion, while advertising revenue was $81.6 billion. Net profit was heavily boosted by roughly $99 billion in equity investment gains tied largely to stakes in Anthropic and SpaceX, helping lift quarterly profit to $112.1 billion and GAAP EPS to $9.11, while adjusted earnings were cited at about $2.85 per share. Investor attention shifted to spending plans after Alphabet raised its 2026 capital expenditure guidance to $195 billion-$205 billion from $180 billion-$190 billion. The company also said its Gemini AI app has 950 million monthly active users and is processing 22 billion tokens per minute, underscoring rapid AI adoption even as free cash flow turned negative $5.9 billion amid heavy infrastructure investment.
- capital expenditure: Money a company spends on long-term assets such as data centers, servers and chips.
- free cash flow: Cash generated after operating and capital spending costs, often used to gauge financial flexibility.
- tokens: Units of text processed by AI models when generating or analyzing language.