Google Cloud Q3 revenue up 103%, but Alphabet results light

Alphabet said Google Cloud revenue surged 103% to $30.7 billion with strong demand across AI workloads and TPU systems.

The company said Google Cloud delivered third quarter operating income of $11.12 billion on revenue of $30.7 billion. Alphabet said its first party APIs are processing 32 million tokens a minute.

Alphabet overall reported third quarter net income of $26.17 billion, or $2.12 a share, on revenue of $127.6 billion. Wall Street was expecting Google to report third quarter earnings of $3.01 a share on revenue of $127.91 billion.

• Google rolls out Gemini 4 Carbon
• How Google Public Sector’s RISE unit works: Show don’t tell
• Google Public Sector customers: Data foundation eases AI bottlenecks

For the second consecutive quarter, free cash quarter was negative. Third quarter free cash flow was negative $9.065 billion. In the second quarter, free cash flow was negative $5.85 billion.

CEO Sundar Pichai said the company delivered a strong quarter and Alphabet's revenue run rate is nearing $500 billion. "Our AI investments are driving overall Search query growth, including commercial queries. In fact, our year-over year query growth rate is the highest it’s been in the last five years," said Pichai.

By the numbers for the third quarter:

• The Gemini app has 1 billion users.
• The company had 150 million YouTube Music and Premium.
• Alphabet said its at-the-market program as of Sept. 30 had $27.6 billion left.

Alphabet said capital expenditures for 2026 will be in the $195 billion to $205 billion range.

On the conference call, Pichai said the following:

• "Our AI infrastructure and solutions are the major drivers for Cloud growth and our customers see us as the leading provider here, so there's huge demand. We are working hard to bring more capacity online to meet this long-term demand. At the same time, we are seeing strong demand for our TPU systems across a wide range of customers, and we expect that to continue as we scale."
• Gemini 4 Argon is seeing strong demand and usage and developer usage in the first week ramped 3.5x faster than Gemini 3 even with capacity constraints.
• "We are at the point where AI is helping us increase our training and launch velocity. I would expect the next 12 months to see continued acceleration because of RSI. We have more models coming soon, including more efficient versions to help developers optimize for speed and cost and to deploy across our billions of users."

Google Cloud CEO Thomas Kurian joined the call. Key quotes include:

• "Google Cloud now has 18 product lines with more than $1 billion each in annual revenue."
• "Over the past 12 months, more than 2,600 customers have used at least 100 billion tokens and nearly 75 at least 10 trillion tokens on Gemini Enterprise. Nearly 90% of the Fortune 100 use Gemini Enterprise, and customers who use Gemini Enterprise in Q3 2025 more than quadrupled their spend with us year-over-year."
• "Nearly 100 customers use TPUs today, and we're seeing strong and growing demand from many others. In addition to our work with Anthropic, both directly and via Broadcom and public reference customers like Apple, who are scaling pretraining of their foundation models on the latest generation of TPUs, we're also working with new frontier model companies, including Mirendil and Physical Intelligence; capital markets firms, including Citadel Securities and Jump Trading; universities like Caltech; and public sector service providers, including Cassava and Cirrascale. Given continued strong and accelerating demand, we've recently entered into partnerships to deliver TPU systems with both Crux AI and Oracle, with more in the works."