$GOOG · Alphabet Inc.
Alphabet filed its Q3 FY2026 10-Q, reporting revenue of $127.6B (+24.7% YoY) and diluted EPS of $2.12, down from $2.87 a year ago. Net income available to common stockholders fell to $26.2B from $35.0B, pressured by a swing in Other Income from +$12.8B to -$8.2B. Google Cloud was the standout: revenue doubled to $30.7B and operating income tripled to $11.1B. Total assets crossed $1 trillion for the first time.
- Revenue hit $127.6B (+24.7% YoY), with Google Cloud surging to $30.7B from $15.2B a year ago.
- Diluted EPS fell to $2.12 from $2.87 YoY, a 26% decline despite strong top-line growth.
- Other income swung from +$12.8B to -$8.2B, driven by derivative and investment losses.
- Google Cloud operating income tripled to $11.1B (36.2% margin), up from $3.6B (23.7% margin).
- Total assets crossed $1 trillion for the first time, reaching $1,003B, with cash/marketable securities at $265B.
Extended-hours trading shows GOOG at $288.60, down 10.34% from the regular close of $321.89. The $3.94T market-cap giant is being repriced on the EPS miss and the sharp negative swing in Other Income, despite 24.7% revenue growth.
A $3.94T company growing revenue 25% while EPS drops 26% is a rare divergence that exposes the fragility of earnings quality beneath headline growth.
Google Cloud's $30.7B quarter and 36.2% operating margin show it closing the gap with AWS and Azure on both scale and profitability. The $127.6B total revenue quarter puts Alphabet on a $500B+ annual run rate, but the EPS decline highlights the cost of the AI arms race.
Other income swung from +$12.8B to -$8.2B YoY, exposing vulnerability to mark-to-market losses on Alphabet's massive investment portfolio. R&D costs jumped 36% to $20.6B, and capex-driven property/equipment surged to $373B, raising depreciation risk if AI monetization lags.