Alphabet Inc. (GOOGL) Q3 2026: Revenue Growth Accelerates, Cloud Soars — Strongly Positive

Alphabet Inc. (GOOGL) reported impressive financial results for the third quarter of 2026, with consolidated revenues increasing by $25.2 billion or +25% year-over-year, reaching $127.6 billion. This marks the company's 13th consecutive quarter of double-digit revenue growth, showcasing robust performance across its business segments.

Key Financial Metrics

• Consolidated Revenues: $127.6 billion, up from $102.3 billion in Q3 2025 (+25% YoY)
• Google Services Revenues: $96.3 billion, up from $87.1 billion in Q3 2025 (+11% YoY)
• Google Cloud Revenues: $30.7 billion, up from $15.2 billion in Q3 2025 (+103% YoY)
• Operating Income: $40.6 billion, up from $31.2 billion in Q3 2025 (+30% YoY)
• Operating Margin: 31.8%, compared to 31% in Q3 2025
• Net Income: $26.2 billion, down from $35 billion in Q3 2025
• Earnings Per Share (EPS): $2.12, down from $2.87 in Q3 2025

Analyst View

This quarter is a strong positive for shareholders, primarily driven by exceptional growth in Google Cloud, which saw a remarkable 103% increase in revenues. The overall revenue growth of 25% indicates that Alphabet is effectively capitalizing on its investments in AI and cloud infrastructure, which are becoming increasingly critical in today's digital economy. The decline in net income and EPS, however, is a point of concern, largely attributed to significant losses in other income, particularly from equity securities.

Dividend and Share Buyback

In October 2026, Alphabet's Board of Directors declared a quarterly cash dividend of $15.63 per share on its Series A and Series B mandatory convertible preferred stock, and a quarterly cash dividend of $0.22 per share on Class A, Class B, and Class C stock. This dividend is payable on November 15, 2026, and December 14, 2026, respectively, signaling the company's commitment to returning value to shareholders despite fluctuations in net income.

Forward Catalyst

Investors should closely monitor Alphabet's continued investment in AI technologies and cloud services, particularly as the company reported the highest year-over-year growth rate in search queries in five years, driven by its AI initiatives. Additionally, the performance of the Gemini app, which has reached one billion users, and the growth of YouTube Music and Premium subscribers, will be critical indicators of future revenue streams. The upcoming quarters will be pivotal as Alphabet navigates the challenges of maintaining profitability while investing heavily in growth areas.

In summary, while the decline in net income and EPS raises some caution, the overall revenue growth and strategic positioning in cloud services and AI present a compelling case for Alphabet's future potential.

CONSOLIDATED STATEMENTS OF INCOME

(in millions, except per share amounts, unaudited)

	Quarter Ended		Year To Date
	September 30, 2025	September 30, 2026	September 30, 2025	September 30, 2026
Revenues	$ 102,346	$ 127,577	$ 289,007	$ 357,269
Costs and expenses
Cost of revenues	41,369	51,419	116,768	138,633
Research and development	15,151	20,640	42,515	55,891
Sales and marketing	7,205	8,804	20,478	24,813
General and administrative	7,393	6,138	16,141	16,890
Total costs	71,118	87,001	195,902	236,227
Income from operations	31,228	40,576	93,105	121,042
Other income (expense), net	12,759	-8,221	26,604	127,478
Income before income taxes	43,987	32,355	119,709	248,520
Provision for income taxes	9,008	5,887	21,994	47,281
Net income	34,979	26,468	97,715	201,239
Preferred stock dividends	0	298	0	384
Net income available to common stockholders	$ 34,979	$ 26,170	$ 97,715	$ 200,855
Basic net income per common share	$ 2.89	$ 2.14	$ 8.06	$ 16.51
Diluted net income per common share	$ 2.87	$ 2.12	$ 7.99	$ 16.33
Number of shares used in basic net income per common share calculation	12,086	12,256	12,130	12,169
Number of shares used in diluted net income per common share calculation	12,203	12,368	12,230	12,324

CONSOLIDATED BALANCE SHEETS

(in millions, except per share amounts)

	As of December 31, 2025	As of September 30, 2026
Assets
Current assets:
Cash and cash equivalents	$ 30,708	$ 56,334
Marketable securities	96,135	208,764
Total cash, cash equivalents, and marketable securities	126,843	265,098
Accounts receivable, net	62,886	72,784
Inventory	2,439	13,308
Other current assets	13,870	23,475
Total current assets	206,038	374,665
Non-marketable securities	68,687	135,230
Deferred income taxes	9,113	1,458
Property and equipment, net	246,597	372,827
Operating lease assets	15,221	20,273
Goodwill	33,380	58,117
Intangible assets, net	1,283	8,817
Other non-current assets	14,962	31,925
Total assets	$ 595,281	$ 1,003,312
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$ 12,200	$ 21,975
Accrued compensation and benefits	17,546	17,729
Accrued expenses and other current liabilities	55,557	74,317
Accrued revenue share	10,864	11,051
Deferred revenue	6,578	9,429
Total current liabilities	102,745	134,501
Long-term debt	46,547	125,102
Income taxes payable, non-current	9,531	12,219
Deferred income taxes	919	27,833
Operating lease liabilities	12,744	16,815
Other long-term liabilities	7,530	9,293
Total liabilities	180,016	325,763
Commitments and contingencies
Stockholders’ equity:
Series A and Series B preferred stock and additional paid-in capital	$0	$18,023
Class A, Class B, and Class C stock and additional paid-in capital	93,126	147,068
Accumulated other comprehensive income (loss)	-1,916	-4,326
Retained earnings	324,055	516,784
Total stockholders’ equity	415,265	677,549
Total liabilities and stockholders’ equity	$ 595,281	$ 1,003,312

Disclaimer

The content on MarketsFN.com is provided for educational and informational purposes only. It does not constitute financial advice, investment recommendations, or trading guidance. All investments carry risk and past performance does not guarantee future results. You are solely responsible for your investment decisions and should conduct independent research and consult a qualified financial advisor before acting. MarketsFN.com and its authors are not liable for any losses or damages arising from the use of this information.