Alphabet Inc. Q2 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Alphabet Q2 2026 Earnings Summary

Overall Results (YoY comparisons unless noted): Consolidated revenue reached $119.8B, +24% (+23% constant currency). This marks the 12th consecutive quarter of double-digit growth. Operating income rose 30% to $40.8B (margin 34%). Net income and EPS grew significantly due to $98B in other income/expense (primarily unrealized equity gains). Operating cash flow: $39.1B (Q2); trailing 12 months: $185.7B. CapEx: $44.9B (majority in AI infrastructure: ~60% servers, 40% data centers/networking). Free cash flow: -$5.9B (Q2) due to CapEx; trailing 12 months: $53.3B. Cash & marketable securities: $242.5B (incl. $87.1B equity securities). Long-term debt: $98.2B. Quarterly dividend declared: $0.22/share.

Google Services

  • Revenue: $94.5B, +15% (strong Search & subscriptions growth).
  • Total advertising revenue: +14% across verticals; World Cup boosted YouTube ads.
  • Search & other ads: $63.3B, +17% (retail & finance largest contributors).
  • YouTube ads: $11.1B, +13% (direct response & brand strength, esp. CTV/living room).
  • Network ads: $7.3B, -1%.
  • Subscriptions & devices: $12.9B, +15% (YouTube Music/Premium & Google One AI plans).
  • Operating income: $39.5B, +20% (margin 41.8%).

Google Cloud

  • Revenue: $24.8B, +82% (accelerated even excluding TPU system sales; GCP grew faster than overall Cloud).

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Operator : Welcome, everyone. Thank you for standing by for the Alphabet Second Quarter 2026 Earnings Conference Call. I would now like to hand the conference over to your speaker today, Jim Friedland, Head of Investor Relations. Please go ahead. James Friedland : Thank you. Good afternoon, everyone, and welcome to Alphabet's Second Quarter 2026 Earnings Conference Call. With us today are Sundar Pichai, Philipp Schindler, and Anat Ashkenazi. Now I'll quickly cover the safe harbor. Some of the statements that we make today regarding our business, operations and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to our forms 10-K and 10-Q, including the risk factors. We undertake no obligation to update any forward-looking statement. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is distributed and available to the public through our Investor Relations website located at abc.xyz/investor. Our comments will be on year-over-year comparisons unless we state otherwise. And now I'll turn the call over to Sundar. Sundar Pichai : Hi, everyone. Thanks for joining us. We have exciting momentum. Alphabet revenue grew 24% year-over-year. Our AI investments are redefining what's p

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