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The parent company behind Google, Alphabet runs the internet's most-used search engine and services like YouTube and Android, along with Google Cloud and early-stage "Other Bets" such as self-driving car company Waymo and drug-discovery firm Isomorphic Labs. It was created in 2015 when Google's founders Larry Page and Sergey Brin reorganized the search giant into a holding company. The name "Alphabet" is a playful nod to both language—the letters that form how Google indexes information—and "alpha," the finance term for outsmarting the market.
Net income reached $112.2B on a $99B non-cash equity gain, while free cash flow turned negative as capex nearly doubled.
turned negative for the first time in years. rose 24% to $119.8B and rose 30% to $40.8B, but nearly doubled to $45.0B in the quarter, pushing free cash flow to -$5.9B. The company is funding an AI infrastructure buildout with debt and equity, and a $99.0B non-cash gain on equity securities obscured the cash flow story in .
Key takeaways
fell to -$5.9B from $5.3B a year earlier as nearly doubled to $45.0B for AI infrastructure, while rose 41% to $39.1B.
rose 298% to $112.2B, driven by $99.0B in net unrealized gains on equity securities, primarily from SpaceX and a private company — a non-cash item that also lifted to $9.11.
rose 82% to $24.8B, driven by infrastructure and platform services and initial TPU system sales, making it the largest contributor to the consolidated revenue increase.
Section summaries
Management's Discussion and Analysis
Q2 FY2026 revenue rose 24% to $119.8B driven by Google Cloud (+82%) and Google Services (+15%); net income surged on $99B unrealized equity gains.
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Consolidated revenues grew 24% to $119.8B, led by 's 82% surge to $24.8B on infrastructure/platform services and initial TPU system sales.
Consolidated rose 24% to $119.8B, with up 15% to $94.5B as added $9.1B on query growth and ad improvements and rose $1.3B on direct response.
widened 1.6 points to 34.0% as cost of revenues grew 18%, slower than the 24% increase, despite higher , , and content costs.
rose to $98.2B from $23.6B a year earlier after the company raised approximately $20.3B in new debt and $49.6B in equity during the first half to fund expansion, and total assets reached $922.0B.
What changed
turned negative at -$5.9B, down from $10.1B in Q1 2026 and $5.3B in Q2 2025, as rose to $45.0B from $35.7B in the prior quarter and $22.4B a year earlier — an acceleration of the AI infrastructure spend flagged in every recent filing.
growth accelerated to 82% from 63% in Q1 2026 and 32% in Q2 2025, adding $4.8B sequentially, with initial TPU system sales contributing for the first time.
The $99.0B non-cash on equity securities in other income was larger than the $36.9B gain in Q1 2026 and the $2.7B gain in Q2 2025, continuing a pattern of volatile non-cash swings driving .
rose to $98.2B from $77.5B in Q1 2026 and $23.6B in Q2 2025, as the company continued issuing debt to fund infrastructure, alongside a newly established $40 billion flagged as a risk.
What to watch
in Q3 2026 as continue to rise and the company funds AI infrastructure with debt and equity.
growth rate in Q3 2026 after reaching 82% in Q2, and whether initial TPU system sales represent a stream.
U.S. antitrust remedy details for Search and Search advertising and their financial impact as the proceeding continues.
Pace of share issuance under the new $40 billion and its effect on diluted share count and stock price.
rose 15% to $94.5B, with up $9.1B on query growth and ad improvements, and up $1.3B on direct response.
expanded 2pp to 34% as cost of revenues grew slower than (18% vs. 24%), despite higher , , and content costs.
ballooned to $112.1B largely due to $99.0B in on equity securities, primarily from SpaceX and a private company.
nearly doubled to $80.6B in H1 2026 for AI infrastructure; the company raised ~$49.6B in equity and $20.3B in debt to fund expansion.
A $1.5B legal charge for a PriceRunner patent case was accrued in G&A, and the EC's $5.2B Android fine was paid in July 2026.
Quantitative and Qualitative Disclosures About Market Risk
For quantitative and qualitative disclosures about market risk, refer to Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2025.
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For quantitative and qualitative disclosures about market risk, refer to Part II, Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" in our Annual Report on Form 10-K for the year ended December 31, 2025.
For a description of our material pending legal proceedings, see Note 10 “Commitments and Contingencies - Legal Matters” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
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For a description of our material pending legal proceedings, see Note 10 “Commitments and Contingencies - Legal Matters” of the Notes to Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.
Alphabet flags new risks from $40B ATM program, AI infrastructure buildout, and evolving global data regulations.
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A newly established $40 billion at-the-market (ATM) equity program and potential conversion of could dilute existing stockholders and depress Class A and C share prices.
Heavy investment in AI-optimized infrastructure (custom , cloud capacity) and new businesses may not yield adequate returns, and long-duration commercial agreements with financial guarantees create excess capacity and counterparty risk.
Intensifying competition in devices, cloud (, ), and (transportation, life sciences) threatens market share and profitability amid rapid technological change.
Evolving global privacy and data protection laws (EU GDPR, DMA, US state children’s/biometric statutes) impose new consent, portability, and interoperability obligations that could force costly operational changes.
Share repurchases and common stock dividends remain discretionary; required preferred stock dividends reduce cash reserves, and any suspension of buybacks during equity offerings may exacerbate stock price declines.