- Revenue increased 25% year-over-year to hit $128 billion, which was in line with what was expected by Yahoo Finance analysts
- YouTube ad revenue came in at $11.2 billion, a 9% year-over-year increase
- Alphabet shares fell 8.7% in after-hours trading
Alphabet reported a 25% increase in revenue during its third quarter earnings report on Thursday. The results were posted after the markets closed.
Revenue came in at $128 billion for the quarter, which was largely driven by a strong quarter for the Google Search & other division. Revenue from that division came in at $63 billion, a roughly 12% year-over-year increase. The year-over-year query growth rate for Google Search was the highest it has been in the last five years. Google Cloud also saw a 103% increase in revenue compared to the third quarter of 2025 with revenue for the division coming in at $30.7 billion. AI overlays and growth in Google Cloud Platform’s enterprise AI infrastructure and solutions were credited for these gains.
YouTube once again had a strong quarter. Ad revenue from the division came in at $11.2 billion, a 9% increase compared to this time last year.
Also, YouTube Music and Premium surpassed 150 million subscribers globally, a number that includes trials. During the quarter, living room viewership accounted for over a third of YouTube’s total ad revenue. Revenue from subscription, platforms and devices increased 11% to hit $14.3 billion. This was driven by strong growth in YouTube subscriptions, particularly when it came to YouTube Music and Premium plans, as well as strong demand for AI plans in Google One.
Earnings per share came in at $2.12, a decline from a year ago when earnings per share came in at $2.87. Earnings excluding one-time items came in at $2.67 a share, which factors a 55 cent-per-share hit from the write-off of equity losses.
Net income dropped by over 25% compared to the third quarter of 2025, coming in at $26 billion. Other income and expenses was negative $8.2 billion due to a loss on Alphabet’s investment SpaceX, which saw a stock decrease during its third quarter. The decrease in both EPS and net income were largely due to this SpaceX loss.
The report comes as Wall Street is growing increasingly hesitant about the vast investment in AI from tech giants. In July, Alphabet increased its capital expenditures forecast for the year — jumping from around $190 billion to anywhere between $195 billion to $205 billion — to account for increased spending on AI. Alphabet’s $195 billion to $205 billion capex guidance range remained unchanged at the end of the third quarter.
“We continue to expect our capex to increase significantly in 2027 and will provide further details on our Q4 call,” Anat Ashkenazi, the CFO of Alphabet, said during the company’s third quarter earnings call.
More to come …