After the US market close on Oct 28, Alphabet reported Q3 2026 results: revenue rose 25% to $127.6B, and Google Cloud revenue more than doubled, up 103% to $30.7B, which the company attributes to enterprise AI infrastructure, AI solutions and TPU system sales. In the release and on X, Sundar Pichai said first-party model APIs now process nearly 32B tokens per minute, more than four times a year ago, and that the Gemini app has reached one billion users. The cost: Q3 capital expenditures of $51.4B and free cash flow of negative $9.1B.
Key Takeaways
- ✓Revenue of $127.58B, up 25% year over year and the 13th straight quarter of double-digit growth; Pichai says Alphabet is on a $500B annual revenue run rate
- ✓Google Cloud revenue of $30.71B versus $15.16B a year ago, up 103%; Cloud operating income of $11.12B versus $3.59B
- ✓First-party model APIs process nearly 32B tokens per minute, more than 4x a year ago; Pichai's X post puts quarter-over-quarter growth at 40%
- ✓The Gemini app reached one billion users, which Google calls the fastest-growing product in its history; Search query growth is the highest in five years
- ✓Q3 capex of $51.36B versus $23.95B a year ago, and free cash flow of negative $9.07B, the second negative quarter in a row
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Background and pain point
The market's main question: AI infrastructure spending keeps climbing, so can revenue keep up? Alphabet's free cash flow had already turned negative last quarter, which makes Q3 a key test of whether AI spending is paying off. Per CNBC citing LSEG, analysts expected $128.2B in revenue and about $28.7B from Cloud.
Architecture and mechanism
Google credits a full-stack approach: its own TPUs, cloud infrastructure, Gemini models and consumer products sold together. Cloud growth this quarter came from GCP enterprise AI infrastructure and AI solutions, and the release explicitly says TPU system sales were a meaningful contributor. Alphabet-level costs, mainly shared AI research and development, were $7.66B versus $4.47B a year ago.
Benchmarks
All figures are from the official release: revenue of $127.58B (+25%), Cloud of $30.71B (+103%), a 31.8% operating margin, and EPS of $2.12 versus $2.87 a year ago, mainly because other income swung to negative $8.22B. First-party model APIs process nearly 32B tokens per minute, and the Gemini app has one billion users. Q3 capex was $51.36B and free cash flow was negative $9.07B.
Getting started
For developers, the clearest signal is that Gemini API usage grew more than fourfold in a year, so expect Google to keep steering capacity and pricing toward the API. Gemini 4 Argon and Carbon are the frontier models Google is pushing, and Carbon is currently limited to cyber defenders in the Fairwind program. The earnings call replay has more detail.
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