Google Q3 Earning Results- Market Brief

Executive summary

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Q3 2026 at a glance

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Consolidated financials

CFO Anat Ashkenazi said Q3 was the 13th consecutive quarter of double-digit revenue growth. Revenue was $127.6B, up 25% both as reported and in constant currency, after +16% in Q3 2025. Growth came mainly from Google Cloud (+$15.6B) and Google Services (+$9.3B).

Q3 2025Q3 2026

$102.3B

$127.6B

Revenue+25% Y/Y

$31.2B

$40.6B

Operating income+30% Y/Y

Source: Alphabet Q3 2026 earnings slides (28 Oct 2026), slides 5–6. Operating margin 30.5% → 31.8%.

Costs and expenses

• Total cost of revenues was $51.4B (+24%), holding at 40% of revenue.
  • TAC was $16.4B (+10%). The TAC rate edged down from 20.1% to 20.0% as revenue shifted from Network to Search.
  • Other cost of revenues was $35.1B (+32%). The increase came from TPU-system hardware and inventory costs, depreciation, content acquisition (largely YouTube) and technical-infrastructure operations.
• Operating expenses were $35.6B (+20%).
  • R&D: $20.6B (+36%; 16% of revenue). Compensation rose $3.5B, mainly from AI talent, and depreciation rose $802M.
  • Sales & marketing: $8.8B (+22%). Advertising and promotion rose $722M, including investment in Gemini, and compensation rose $715M.
  • G&A: $6.1B (−17%). Legal and other costs were $2.1B lower because Q3 2025 included a $3.5B EC fine accrual. Q3 2026 includes its own legal charges, including $1.0B for EU Digital Markets Act fines.

TAC +10%Other cost of revenues +32%R&D +36%Sales & marketing +22%G&A −17%

Q3 2025Total $71.1B

$14.9B$26.5B$15.2B$7.2B$7.4B

Q3 2026Total $87.0B

$16.4B$35.1B$20.6B$8.8B$6.1B

Source: Alphabet Q3 2026 earnings slides (28 Oct 2026), slides 5 and 7.

Below the operating line: SpaceX drives the profit decline

Other income and expense swung from a $12.8B gain to an $8.2B loss. The main item was a $12.4B unrealized loss on marketable equity securities, "largely from SpaceX," after its share price fell. Alphabet holds $75.2B of SpaceX shares, which carry short-term restrictions on sale. A $3.0B unrealized gain on non-marketable securities, mostly from one private company, partly offset the loss. Interest expense rose to $967M from $143M as debt increased, net of $405M of capitalized interest. Interest income was $1.8B.

Income from operations

$40.6B

Other income (expense), netSpaceX mark-down

−$8.2B

Income before taxes−26%

$32.4B

Provision for income taxesETR 18.2%

−$5.9B

Net income−24%

$26.5B

Net income to common holdersafter $298M preferred dividends

$26.2B

Negative items are shown as red bars. Diluted EPS was $2.12, versus $2.87 a year earlier (−26%).

Source: Alphabet Form 10-Q, quarter ended 30 Sep 2026, consolidated statements of income and Note 7.

• The effective tax rate fell to 18.2% from 20.5%, because of lower pre-tax income from the equity losses, a larger foreign-derived deduction and fewer non-deductible fines.
• Net income was $26.5B (−24%). Net income available to common stockholders was $26.2B (−25%) after $298M of dividends on the new preferred stock.
• Diluted EPS was $2.12 (−26%) and basic EPS was $2.14.
• Stock-based compensation was $8.7B in the quarter, up from $6.4B. Unrecognized compensation cost is $61.8B, to be recognized over about 2.8 years.

View the full Q3 income statement table

$ millions	Q3 2025	Q3 2026	Y/Y
Revenues	102,346	127,577	25%
Cost of revenues	41,369	51,419	24%
of which TAC	14,876	16,366	10%
of which other cost of revenues	26,493	35,053	32%
Research & development	15,151	20,640	36%
Sales & marketing	7,205	8,804	22%
General & administrative	7,393	6,138	(17%)
Total costs & expenses	71,118	87,001	22%
Income from operations	31,228	40,576	30%
Other income (expense), net	12,759	(8,221)	NM
Income before income taxes	43,987	32,355	(26%)
Provision for income taxes	9,008	5,887	(35%)
Net income	34,979	26,468	(24%)
Preferred stock dividends	0	298	N/A
Net income available to common stockholders	34,979	26,170	(25%)
Diluted EPS	$2.87	$2.12	(26%)

Source: Alphabet Q3 2026 earnings slides, slide 5; Form 10-Q.

View the nine-month (January–September) data table

$ millions	9M 2025	9M 2026	Change
Revenues	289,007	357,269	+24%
Google Services revenue	246,859	280,479	+14%
Google Cloud revenue	41,041	75,505	+84%
Income from operations	93,105	121,042	+30%
Google Cloud operating income	8,597	26,533	3.1x
Other income (expense), net	26,604	127,478	+$100.9B
Net income	97,715	201,239	+106%
Diluted EPS	$7.99	$16.33	+104%
Operating cash flow	112,311	127,149	+13%
Capital expenditures	63,596	131,953	+107%
Depreciation of property & equipment	15,096	21,955	+45%
Effective tax rate	18.4%	19.0%	+0.6 pt

Source: Form 10-Q. Percentage changes are NextGComm calculations. The nine-month other income figure reflects earlier gains on a private company and on SpaceX before its IPO.

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Segment performance

Q3 2025Q3 2026

Google Search & other+12%

$56.6B

$63.4B

Google Cloud+103%

$15.2B

$30.7B

Subscriptions, platforms & devices+11%

$12.9B

$14.3B

YouTube ads+9%

$10.3B

$11.2B

Google Network+1%

$7.4B

$7.5B

Other Bets+8%

$344M

$372M

Hedging gains of $194M (vs. a $207M loss a year earlier) are not allocated to segments.

Source: Alphabet Form 10-Q, quarter ended 30 Sep 2026, Note 2; Alphabet Q3 2026 earnings slides (28 Oct 2026), slides 6–7. Other Bets growth is a NextGComm calculation.

Google Services: $96.3B revenue (+11%), operating income $39.2B (+17%)

• Total advertising was $82.0B (+11%), with growth in all major verticals. FX was a slight headwind Y/Y and a larger one sequentially.
• Search & other was $63.35B (+12%). Retail contributed most, followed by finance. The 10-Q attributes growth to higher query volume, advertiser spending, and better ad formats and delivery.
• YouTube ads were $11.2B (+9%). Brand advertising was the largest contributor, followed by direct response. The living room was notably strong.
• Google Network was $7.5B (+1%). AdMob grew while AdSense declined.
• Subscriptions, platforms & devices were $14.3B (+11%), driven by YouTube subscriptions (Music & Premium), Google One AI plans and higher Pixel sales.
• Operating margin rose to 40.7% from 38.5%, helped by lower legal costs and partly offset by higher TAC.

Search paid clicks

+8%

Search cost-per-click

+4%

Network impressions

-14%

Network cost-per-impression

+14%

Source: Alphabet Form 10-Q, quarter ended 30 Sep 2026, MD&A (monetization metrics). Nine-month: paid clicks +11%, CPC +4%, impressions −11%, cost-per-impression +11%.

Google Cloud: record growth

Cloud revenue was $30.7B (+103%). Growth was driven by Google Cloud Platform (GCP), across AI infrastructure, AI solutions and core GCP. GCP made up the vast majority of revenue. TPU system sales were a meaningful contributor, and growth excluding TPU systems was "again very strong." Operating income was $11.1B, more than 3x the prior year, and margin rose 12.5 points to 36.2%. Higher inventory costs tied to TPU systems and higher infrastructure usage costs partly offset the gain. Details are in Section 6.

Other Bets and Alphabet-level activities

• Other Bets: revenue was $372M and the operating loss was $2.0B (vs. $1.4B), driven by Waymo's expansion and higher compensation. GFiber's results stay in Other Bets until its pending divestiture closes.
• Alphabet-level activities: the operating loss was $7.7B (vs. $4.5B), mainly from shared AI research and development.

Q3 2025Q3 2026Q3 2026 loss

Google Servicesmargin 40.7%

$33.5B

$39.2B

Google Cloudmargin 36.2%

$3.6B

$11.1B

Other Betsloss

−$1.4B

−$2.0B

Alphabet-level activitiesshared AI R&D

−$4.5B

−$7.7B

Source: Alphabet Form 10-Q, quarter ended 30 Sep 2026, Note 15.

Q3 2025Q3 2026

United States (53%)+39%

$48.8B

$67.7B

EMEA (26%)+9%

$29.9B

$32.7B

APAC (16%)+12%

$17.8B

$19.9B

Other Americas (5%)+17%

$6.1B

$7.1B

The U.S. share rose from 48% to 53% of revenue, in line with Cloud and TPU demand there.

Source: Alphabet Form 10-Q, quarter ended 30 Sep 2026, Note 2. Growth rates are NextGComm calculations from reported figures.

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Search, ads & agentic commerce

Search product

• Sundar Pichai said Search brings AI to more people than any other product. As in the mobile shift a decade ago, Google is putting user experience first and monetization second.
• Google is building one seamless experience across AI Overviews, AI Mode and traditional Search.
• Queries are longer, more personal and more multimodal. AI Mode queries are about 3x longer than traditional searches, and 1 in 5 AI Mode searches globally uses voice, images or documents. There are more than 50 billion visual searches per month.
• Overall query growth, including commercial queries, is the highest in five years.
• The focus is on getting things done: booking reservations, filling in forms, scheduling appointments and making purchases.
• Agentic features were built first in Gemini Agent for Enterprise, where the bar for security and governance is highest. They come next to Search and to the Gemini app's billion users, and later to Chrome, Android and Workspace. Agents become "a unifying layer" across products.

Why Search growth slowed from Q2 to Q3

Ads: three areas where Gemini is deployed

1. Ads quality

• Gemini improves how well Google decodes user intent and matches relevant ads.
• This quarter brought the biggest Product Listing Ads update in a decade. Satisfaction rose 19% and dissatisfaction fell by more than half.
• AI models improve click and conversion prediction and ad personalization. Personalization modeling delivered 18% incremental advertiser value and an 8% increase in user sentiment on Discover ads in 2026.
• AI drives the majority of ads product launches.

2. Advertiser tools

• Adoption of AI Max and Performance Max remains strong. Advertisers can now test different budgets and ROI targets across several Search campaigns in one AI Max A/B test.
• AI creative tools are now built into AI Max. In Q3, Gemini helped advertisers generate more than 1.5B campaign assets, up more than 7x.
• Telstra used AI Max to capture long-form and multilingual queries. Conversions rose 52% and cost per order fell 36%.

3. AI user experiences

• Many AI Mode queries are upper-funnel, capturing new high-value commercial intent, and most are incremental to traditional Search.
• Users find ads on these surfaces relevant. Click-through rates on sponsored and organic product listings in AI Mode are already similar.
• Announced on call Ads in AI Mode are expanding to international markets, and multi-turn ads in AI Mode are launching in the U.S. This takes AI-surface monetization global for the first time.
• The approach is to put user experience first, then scale ad formats that have proven advertiser ROI.

Agentic commerce

• The Universal Commerce Protocol (UCP) is being adopted quickly by retailers. It enables direct checkout across Google for hundreds of thousands of brands, including Chewy, Nike and Tapestry. UCP is combined with the Agent Payments Protocol.
• Google is working on two tracks: agents that act for the consumer, and tools that give shoppers confidence and control. Universal Cart, launched this quarter, belongs to the second track. Retailers keep the customer relationship, capture the sale and avoid abandoned carts.
• Schindler said agentic commerce is early but "clearly additive." He expects ad models to work in agentic flows because there is rarely one perfect option. For example, an agent might show an insurance product alongside an alternative with a higher premium, lower deductible and a special discount. Subscriptions and other payment models are also possible.
• Schindler said AI can automate the "grunt work" of shopping while keeping the discovery people enjoy, because shoppers weigh brand loyalty and service as well as price. Pichai added that Gemini app users already run complex, multi-step agentic queries, and that the Gemini 4 series handles them well.

Strategic partnerships and commercial priorities

• American Express: an expanded partnership to modernize contact centers and work together on agentic commerce across Search and Wallet.
• Unity: an expanded multi-year Cloud deal that uses Google's full AI stack for Unity's next-generation game engine.
• Priorities: grow advertiser ROI, make AI monetization more efficient, and scale ecosystem partnerships "for the next era of discovery."

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Google Cloud & TPU systems

Q3 2025Q3 2026

$15.2B

$30.7B

Revenue+103% Y/Y

$3.6B

$11.1B

Operating income3.1x · margin 36.2%

Source: Alphabet Q3 2026 earnings slides (28 Oct 2026), slide 8. Prior-year growth was +34%; prior-year margin 23.7%.

Thomas Kurian (CEO, Google Cloud) credited an integrated AI portfolio of chips, models, data, security and agent platforms designed to work together. The business is diversified across product lines, industries and customers.

Source: Q3 2026 earnings call (Thomas Kurian). These are management-stated metrics and are not in the 10-Q.

Gemini Enterprise and customer wins

• Nearly 90% of the Fortune 100 use Gemini Enterprise. Customers that used it in Q3 2025 more than quadrupled their spend with Google year-over-year.
• Over 100M seats have been sold for knowledge work across all AI services.
• Gemini Enterprise now includes Gemini Agent, which researches and answers questions, writes and runs code, and automates processes through one agent, one API and one prompt window. It has security and cost controls and offers the widest choice of frontier models.
• BNP Paribas is rolling out Gemini Enterprise to 65,000+ employees. Tata Steel built 300+ specialized agents in nine months, cutting customer service times by 50%. Ulta Beauty's AI Shopping Assistant converts 3x better than traditional browsing.
• Google Cloud has generated "tens of billions of dollars" of AI revenue year-to-date (CFO).

Data and analytics

• Gemini is speeding up Google's database, analytics and security products. Knowledge Catalog helps Gemini find the right sources, improving accuracy and lowering token cost. The Lakehouse gives zero-copy access across systems.
• BigQuery queries run more than 40% faster, and query processing costs are down more than 50%.
• Deutsche Telekom built a unified data lakehouse over 40+ legacy on-premise systems using BigQuery, Cloud Storage and Knowledge Catalog. Etsy migrated 3 PB, and its critical data joins now run up to 60% faster with BigQuery and Iceberg.

Security

• Gemini Flash Cyber models automate vulnerability discovery in 20 programming languages and patch 2.6x more reliably than other models. Argon and Carbon should improve this further.
• The platform covers threat intelligence, response prioritization, automated scanning, code remediation and monitoring. Gemini in Google Threat Intelligence analyzes millions of external events daily with 98% accuracy.
• More than 95% of Wiz customers are adopting its AI features. Security customers include Banorte, Jack Henry and AT&T. Alphabet closed the $29.5B Wiz acquisition on 11 March 2026, adding $22.7B of goodwill to Cloud.

AI infrastructure and TPU systems

• The infrastructure portfolio includes TPU systems, Axion CPUs, the latest NVIDIA GPUs and Agent Compute Engine, which is built for AI agents.
• TPU 8t delivers up to 2.7x better training performance, and TPU 8i 80% better inference price-performance, compared with the previous generation.
• TorchTPU, built with Meta, lets developers train, serve and deploy PyTorch models on TPUs using existing tools.
• About 100 customers use TPUs today (in Q&A, Kurian said "over 100 significant" customers). They include Anthropic (directly and through Broadcom), Apple (pre-training foundation models), Physical Intelligence, Citadel Securities, Jump Trading, Caltech, Cassava and Cirrascale.
• New New partnerships will deliver TPU systems through Oracle and Crux AI, with more in the works.

How TPU system sales work financially

1. A signed TPU contract first enters the backlog.
2. Google buys components and builds inventory ahead of revenue, so cash goes out and inventory rises. All TPU inventory is tied to committed contracts.
3. When systems are delivered and billed, revenue is recognized and cash comes in. Ashkenazi called this "a different cash-flow cycle," not traditional capex.

• Some system sales are already in revenue. Sales scale in Q4, with a meaningful revenue ramp in 2027.
• Google gives no product-level financials or margins. Kurian said the focus is on improving margins as the business scales, helped by TPU price-performance, scarce accelerated compute and economies of scale.
• Per the 10-Q, a TPU system sale includes hardware, software, installation, support and extended warranty. Some contracts include repurchase options at pre-set prices, with maximum potential payments of $6.6B. Google does not believe customers have an economic incentive to exercise them.
• Distribution runs through three channels: Google Cloud, customer data centers (for data that can't move to cloud) and other providers. This widens the market without Google having to build every facility in advance.
• An analyst asked what share of a ~$35B-per-gigawatt TPU system becomes revenue. That figure is the analyst's framing; Google did not confirm it.

Crux AI: the Blackstone joint venture

In May 2026 Google agreed with Blackstone to form a U.S. joint venture offering data-center capacity, operations, networking, hardware and software as a single compute-as-a-service product. It was formally announced as Crux AI in Q3. Blackstone has committed up to $5.0B of capital. Google has committed up to $10.0B of data-center and energy infrastructure backstops, holds a minority stake (accounted for under the equity method) and signed a multi-year commercial agreement with the venture, which is a related party. That agreement adds $16.8B to backlog.

Total Alphabet backlog>55% within 24 months

$567.7B

of which Google Cloud

$560.8B

of which Crux AI agreementrelated party

$16.8B

Source: Alphabet Form 10-Q, quarter ended 30 Sep 2026, Note 2. Since Q1 2026, backlog also includes contracts of one year or less.

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Gemini 4, models & agents

Model releases, July to October 2026

Slide 3 shows ten launches in sequence between July and October 2026:

1. July 2026 →Gemini 3.6 Flash and 3.5 Flash Cyber · Gemini 3.5 Transcribe
2. ThenGemini 3.7 Flash · Omni 1.1 Flash
3. ThenGemini 3.8 Flash and 3.8 Flash Cyber · Lyria 3.5
4. October 2026Gemini 4 Argon (about two weeks before the call) · Gemini 3.8 Live & Extended Thinking
5. → Late October 2026Gemini 4 Carbon (announced on the call day) · Nano Banana 2.1

Source: earnings slide 3 (release order). Dates for Argon and Carbon are from the call. Separately, Google announced the Genie 4 world model the day before the call.

• Google's own models process about 32B tokens per minute, including Gemini through direct API use. That is up 40% Q/Q and more than 4x Y/Y.
• The Gemini app has passed 1B monthly active users and is the fastest-growing product in Google's history. It recently added a Task tab for agentic queries.
• More models are coming, including more efficient versions for speed and cost. Isomorphic is using Argon for drug-design research.

AI is speeding up Google's own engineering

• Pichai said a step change began internally with Gemini 3.8 Flash, which is better at long-horizon tasks and agentic coding. Deploying Argon internally, about four weeks before the call, was "one of the most meaningful productivity levers" in software engineering. Google tracks high-quality code check-ins and how often they happen.
• Carbon is now deployed internally and is a meaningful step up. As it rolls out to all Googlers with more compute, Pichai expects a "golden year" of productivity in 2027. AI is also speeding up Google's own training and launch pace, and he expects that to keep accelerating over the next 12 months.

What agents need, and the trust question

• Pichai said a capable model is not enough. Agents also need a robust harness, a secure runtime, 24/7 cloud availability and an ecosystem of skills and connectors, all of which GCP provides.
• Agents launched in enterprise first and come to consumers later in 2026, starting with the Gemini app. He compared adoption to coding tools: at a 70% success rate an agent seems not to work, until it crosses a threshold and takes off.
• Users rank safety and trust very highly. Google points to decades of trust at billions-of-users scale, end-to-end security, extensive testing and real-time monitoring. Users will "vote with their feet."
• The 10-Q adds new risk-factor language on AI agents. Errors can compound across multi-step workflows, AI is speeding up how fast vulnerabilities are found and exploited, and AI-enabled cyberattacks are rising.

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YouTube & subscriptions

• YouTube is the #1 U.S. streaming platform by watch time and leads in the living room. The living room was more than one-third of YouTube ads revenue in Q3.
• At Made on YouTube in September, Google announced 30+ products and features, including Custom Feeds (a tailored home feed for a chosen topic) and Shorts Series (Shorts organized into seasons and episodes, with sequential playback).
• Creators upload more than 20M videos every day. New generative AI tools arrived in YouTube Studio, along with a conversational editing assistant in Shorts and YouTube Create.
• Demand Gen adoption by small and medium advertisers continues. Wayfair's Demand Gen campaigns delivered 2.3x higher ROAS than traditional video reach campaigns.
• YouTube Creator Partnerships connects brands with 3M+ creators. Lexus's campaign with creators Colin and Samir lifted brand consideration by 11%.
• YouTube Shopping has 1.3M+ enrolled channels. New Amazon is joining, so U.S. creators can tag Amazon products in videos, Shorts and livestreams.
• Subscriptions are growing faster than ads. YouTube Music and Premium have 150M subscribers including trials, and Premium Lite gives viewers another option. Google One is the fastest-growing subscription product, driven by AI plans.

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Waymo, Other Bets & long-term bets

Other Bets revenue was $372M and the operating loss was $2.0B, reflecting Waymo's expansion and other bets.

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Capex, cash flow & balance sheet

Capex

Capex was $51.4B (+114%), mostly technical infrastructure for AI. About 65% went to servers and networking (useful life about 6 years) and 35% to data centers (7–40 years). Nine-month capex was $132.0B, compared with $63.6B a year earlier. 2026 guidance of $195–205B is unchanged, and 2027 capex will "increase significantly," with details on the Q4 call.

$24.0B

Q3'25+83%

$27.9B

Q4'25+95%

$35.7B

Q1'26+107%

$44.9B

Q2'26+100%

$51.4B

Q3'26+114%

Source: Alphabet Q3 2026 earnings slides (28 Oct 2026), slide 10. Green figures show Y/Y growth. 2026 guidance: $195–205B (call).

Cash flow

• Quarterly operating cash flow was $42.3B (−13%). The decline came from the TPU inventory build and the $5.2B payment in July for the 2018 EC Android fine plus interest, which was due after the European Court of Justice rejected Google's appeal.
• Free cash flow was −$9.1B, the second negative quarter in a row (Q2: −$5.9B). Trailing-12-month FCF was $19.7B, down from $73.6B a year earlier.
• Trailing-12-month operating cash flow was $179.6B, per the slides. The call said "$179.1B"; see the data notes.

Operating cash flowFree cash flowNegative FCF

$48.4B

$24.5B

Q3'25

$52.4B

$24.6B

Q4'25

$45.8B

$10.1B

Q1'26

$39.1B

−$5.9B

Q2'26

$42.3B

−$9.1B

Q3'26

Source: Alphabet Q3 2026 earnings slides (28 Oct 2026), slides 11–12 (free cash flow is a non-GAAP measure: operating cash flow less capex).

$73.6B

Q3'25

$73.3B

Q4'25

$64.4B

Q1'26

$53.3B

Q2'26

$19.7B

Q3'26−73% Y/Y

Source: Alphabet Q3 2026 earnings slides (28 Oct 2026), slide 12. TTM operating cash flow $179.6B; TTM capex $159.8B.

Balance sheet

• Cash and marketable securities were $265.1B. That includes $90.4B of marketable equity securities, of which $75.2B is SpaceX stock that carries short-term restrictions on sale.
• Non-marketable securities were $135.2B, of which $128.2B sits under the measurement alternative and "primarily" consists of one private company.
• Long-term debt was $125.1B, with a fair value of about $114.9B. There is no commercial paper outstanding (the program allows up to $25B) and nothing drawn on $10B of revolving credit facilities.
• Inventory was $13.3B, up from $2.4B, mostly TPU-system hardware. Property and equipment was $372.8B, including $145.3B not yet in service. Goodwill was $58.1B after the Wiz and Intersect deals.
• Deferred revenue was $12.6B and accrued legal fines and settlements were $13.8B. There were 204,757 employees at 30 September 2026.

Dec 31, 2025Sep 30, 2026

Total assetscrossed $1T

$595.3B

$1,003.3B

Property & equipment, net+51%

$246.6B

$372.8B

Cash & marketable securities+109%

$126.8B

$265.1B

Non-marketable securities+97%

$68.7B

$135.2B

Long-term debt+169%

$46.5B

$125.1B

Inventory (mostly TPU hardware)5.5x

$2.4B

$13.3B

Source: Alphabet Form 10-Q, quarter ended 30 Sep 2026, consolidated balance sheets. Percentage changes are NextGComm calculations.

Funding the build-out: debt and equity

• Bonds: Alphabet has issued $45.0B of U.S. dollar notes and $35.8B of foreign-currency notes (sterling, Swiss franc, euro, Canadian dollar, yen and Australian dollar) in 2026. Q3 issuance included $23.8B of fixed-rate and $1.3B of floating-rate U.S. dollar notes (weighted-average coupon 5.55%, 15-year average maturity) and A$5.6B of Australian dollar notes (5.82%, 8 years). Q3 net proceeds were $28.7B. The longest tranche is a 6.125% sterling note due 2126.
• Common stock: on 4 June, a public offering of 29M Class A shares (at $355.20) and 29M Class C shares (at $351.80) raised $20.5B net. A concurrent $10.0B private placement of 14M Class A and 14M Class C shares went to a Berkshire Hathaway affiliate.
• Mandatory convertible preferred: on 5 June, Alphabet issued 385M depositary shares (GOOGM and GOOGN) representing 19M shares of 6.25% preferred stock, for $19.0B net. They convert by about 15 May 2029. A $1.0B capped call, with caps of $532.67 (Class A) and $527.80 (Class C), reduces dilution.
• At-the-market program: up to $40B, mainly to cover tax obligations on employee equity. Alphabet has sold 12M Class A and 24M Class C shares for $12.4B, leaving $27.6B available.
• Buybacks: none in 2026. $69.5B remains authorized.
• Dividends: the Board declared $0.22 per share on Class A, B and C stock, payable 14 December 2026 to holders of record on 7 December. It also declared $15.63 per preferred share (about $0.78 per depositary share), payable 15 November. Q3 cash dividends were $2.7B on common stock and $234M on preferred.

US dollar senior notes (face)

$45.0B

Foreign-currency senior notes (face)GBP, CHF, EUR, CAD, JPY, AUD

$35.8B

Public offering of common stock (net)June 4

$20.5B

6.25% mandatory convertible preferred (net)June 5

$19.0B

At-the-market program (net)$27.6B left

$12.4B

Berkshire Hathaway private placementJune 4

$10.0B

Share repurchases in 2026: none. $69.5B of the April 2025 $70B authorization remains.

Source: Alphabet Form 10-Q, quarter ended 30 Sep 2026, Notes 6 and 11. Waymo's separate $5.0B term loan (October 2026) is excluded.

Commitments, backstops and guarantees

Alphabet disclosed $924.4B of material purchase commitments. $802.1B of that is multi-year (infrastructure, inventory, take-or-pay energy and content licenses), mostly paid through 2031, and $213.4B is due within 12 months. There are also $130.5B of leases that have not yet commenced, for data centers and energy, starting between 2026 and 2031 with terms of 1–26 years. Equity funding commitments total $21.9B, and the call grouped these two items as "$152B" of pre-commencement leases and other obligations. Management stressed that these are maximum contractual amounts and that variable pricing and volume flexibility could lower actual spend.

Material purchase commitments$213.4B due in 12 months

$924.4B

Leases not yet commencedstart 2026–2031

$130.5B

Data-center backstops (contingent)$10B with Crux AI

$75.7B

Financial guarantees (contingent)

$22.8B

Equity funding commitments

$21.9B

Purchase commitments are stated at maximum contractual pricing and volume. Management says flexible pricing and volumes could lower actual spend.

Source: Alphabet Form 10-Q, quarter ended 30 Sep 2026, MD&A liquidity section and Notes 4, 5 and 10.

• Of the $75.7B of data-center backstops, $48.0B is signed with third-party data-center providers and accounted for as credit derivatives. The remaining $27.7B is an obligation to arrange future backstops, $10.0B of it with Crux AI.
• The $22.8B of guarantees includes $16.2B to help partners buy long-lead energy equipment (running to 2049) and $6.6B of TPU repurchase guarantees.
• Funding commitments to unconsolidated variable-interest entities rose to $31.9B from $1.1B. That includes $20.0B of future capital funding to one private company, contingent on milestones through 2030.
• A short-term lease signed in June 2026 has about $6.0B of non-cancelable commitment remaining.

ROIC framing

Ashkenazi expects ROIC to stay "meaningfully above" the cost of capital through this cycle, with strong operating cash flow. Infrastructure spending and the TPU inventory build will keep pressure on free cash flow. Pichai said each business sets long-range compute plans under a disciplined ROIC framework.

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Legal & regulatory

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Outlook & guidance (company statements only)

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Analyst Q&A highlights

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Sources

1. Alphabet Inc., Q3 2026 earnings conference call. Speakers: Sundar Pichai (CEO), Philipp Schindler (Chief Business Officer), Thomas Kurian (CEO, Google Cloud), Anat Ashkenazi (CFO); host Jim Friedland (Head of Investor Relations).
2. Alphabet Inc., Q3 2026 earnings slides, 28 October 2026 (abc.xyz/investor).
3. Alphabet Inc., Form 10-Q for the quarter ended 30 September 2026.

Forward-looking statements are the company's and carry risks. See Alphabet's Forms 10-K and 10-Q. Free cash flow is a non-GAAP measure. NextGComm Advisory content is analysis, not investment advice.

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