Alphabet Stock Earnings Reports

Alphabet reported an outstanding Q1 2026: consolidated revenue of $109.9B (up 22% YoY), 11th consecutive quarter of double-digit revenue growth, and net income of $62.6B (up 81% YoY). Key drivers were AI-led product adoption across Search, Cloud and consumer subscriptions. Search & Other grew 19%, YouTube ad revenue grew 11%, and Google Cloud revenue accelerated 63% to over $20B with backlog nearly doubling sequentially to $462B. Cloud momentum was driven by strong demand for GenAI solutions (GenAI product revenue grew ~800% YoY), infrastructure (TPUs/GPUs) and large enterprise deals (more $100M–$1B and multiple >$1B deals). Consumer AI subscriptions are accelerating (350M paid subscriptions now), and first‑party models processed 16B tokens/min via direct API. Alphabet is prioritizing heavy CapEx to support AI infrastructure: Q1 CapEx was $35.7B, full‑year 2026 CapEx guidance raised to $180–190B, and management expects 2027 CapEx to increase significantly. Margins expanded: operating income $39.7B and operating margin 36.1%; Google Cloud operating margin widened to 32.9% (tripled YoY). Management highlighted product advances (Gemini models, TPU 8 generation, Gemma 4, open models downloads) and commercial initiatives (Universal Commerce Protocol for agentic e‑commerce, Gemini Enterprise, Wiz acquisition for cybersecurity). Other Bets remain investment areas (Waymo expansion), while Verily and GFiber moves will deconsolidate. Outlook notes FX tailwind normalization, TPU hardware revenue timing variability, and a low single‑digit point headwind to cloud margin in 2026 from the Wiz acquisition.