Alphabet Inc. (GOOGL) Q2 FY2026

Business

From the FY2025 10-K, accession 0001652044-26-000018.

Alphabet is a holding company whose dominant asset is Google. It reports three segments, Google Services, Google Cloud, and Other Bets, plus Alphabet-level activities, an unallocated bucket that carries centralized AI research and frontier-model development serving all businesses.

Google Services is the profit engine. Core products and platforms include Search, YouTube, Android, Chrome, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Gemini, and devices. It makes money in two ways:

• Advertising, split for reporting into (1) Google Search & other, Google search properties plus owned-and-operated surfaces like Gmail, Maps, and Play, including traffic from search distribution partners who set Google.com as default; (2) YouTube ads; and (3) Google Network, third-party properties in AdMob, AdSense, and Google Ad Manager. Alphabet distinguishes performance advertising (click-driven, measurable direct response) from brand advertising. Advertising was more than 70% of total revenues in 2025.
• Subscriptions, platforms, and devices, YouTube TV, YouTube Music and Premium, NFL Sunday Ticket, Google One (which bundles access to the most capable Gemini models), Google Play app sales and in-app purchases, and Pixel hardware.

Monetization is tracked with paid clicks and cost-per-click (Search & other) and impressions and cost-per-impression (Network).

Google Cloud sells consumption-based fees and subscriptions across AI-optimized infrastructure (custom TPUs and third-party GPUs), the Vertex AI developer platform (200+ foundation models), cybersecurity, data and analytics, and agent products (Gemini Enterprise, Gemini for Google Workspace), plus Google Workspace subscriptions. As of the June 2026 quarter, Cloud also books product sales, principally sales of TPU systems to customers requiring on-premises infrastructure for high-scale workloads, a new revenue line.

Other Bets spans businesses at very different maturities, X (the moonshot factory) at the research end, Waymo (fully autonomous paid ride-hailing, expanding domestically and internationally) and Isomorphic Labs (AI drug discovery) further along. Revenue comes primarily from autonomous transportation and internet services. Some Other Bets have their own boards and outside investors.

Strategic frame. Alphabet describes a "full-stack" AI approach: AI-optimized infrastructure (including the seventh-generation Ironwood TPU), frontier research and models (Gemini 3), and distribution through products used by billions. All 15 of Alphabet's half-billion-user products, seven of which have two billion users, run on Gemini models. Alphabet says it invested more than $200 billion in R&D over the last five years.

Cost structure. Cost of revenues = traffic acquisition costs (TAC, paid to distribution partners and Google Network partners) + other cost of revenues (content acquisition, principally YouTube; depreciation of technical infrastructure; technical-infrastructure compensation; device and TPU-system inventory; energy, equipment, and network capacity). Operating expenses split into R&D (engineering compensation, infrastructure depreciation, energy/equipment), sales and marketing, and G&A (which absorbs legal fines and settlements).

Competition is explicitly framed as broad: general-purpose and vertical search engines, e-commerce providers, online advertising platforms and networks, offline advertising, digital content and app platforms, enterprise cloud providers, AI model developers, consumer hardware makers with proprietary platforms, digital video services, social networks, and workspace communication tools.

Workforce and control. 190,820 employees as of December 31, 2025. Class B stock carries 10 votes, Class A one vote, Class C none; Larry Page and Sergey Brin beneficially owned roughly 89.3% of Class B at year-end 2025, about 52.7% of total voting power.

Risk factors

Condensed from the FY2025 10-K, accession 0001652044-26-000018, with material updates from the 10-Q for the quarter ended June 30, 2026, accession 0001652044-26-000071.

Advertising concentration. More than 70% of 2025 revenues came from online advertising. Advertisers, distributors, publishers, and content providers can terminate at will. AI is reshaping how ads are delivered and there is no assurance Alphabet adapts competitively to new formats. Ad-blocking technologies, privacy-practice changes (Alphabet's own and other companies'), and macroeconomic softness all bear directly on the revenue base.

The capital-intensity risk, now the central one. Alphabet is expanding property and equipment investment sharply, and warns that changes in historical asset performance, expected technology advancements, or future deployment plans could shorten the useful lives over which those assets are depreciated. It is entering significant third-party leasing arrangements for compute capacity and a number of large, long-duration commercial agreements; in a nonperformance event or an industry downturn it could incur additional liabilities, hold excess capacity it cannot easily redeploy, and fail to collect from counterparties. The 10-Q updates this to name the newer exposures explicitly: supplying TPU systems to third parties increases cost and operational complexity, and Alphabet has issued financial guarantees and backstops supporting third-party data center and power infrastructure build-out.

Supply, power, land, and water. Alphabet states plainly that its ability to scale technical infrastructure is "increasingly constrained by the availability of power, water, and land," that global energy supply is constrained by AI compute demand, and that supply of specialized AI chips is limited to a small number of qualified suppliers. Industry capacity for AI accelerators (GPUs and its own TPUs) is highly competitive; if competitors claim supply first, Alphabet faces higher costs and constraints. Securing power involves complex, long-lead-time arrangements.

Margin and growth-rate compression. Revenue growth may decelerate from changing usage, competing technologies, geographic mix, pricing, and product/policy changes. Margins face pressure from fixed-cost infrastructure that does not scale with revenue, rising regulation and competition, and mix shift toward structurally lower-margin lines (Cloud, devices, consumer subscriptions, Other Bets). Alphabet notes device margins have already weighed on consolidated margins.

AI-specific liability and reputational risk. AI-enabled products raise exposure on harmful content, inaccuracy, discrimination, IP infringement and misappropriation, rights of publicity, defamation, privacy, cybersecurity, and minor protection. Alphabet concedes it may not identify or resolve all AI-related deficiencies before they arise.

Competition in AI. Frontier model development requires large, sustained investment; deployment depends on availability and pricing of third-party equipment, network capacity, and energy. Competitors may build similar or superior technology more cheaply, or hold patents that limit Alphabet's ability to make, use, or sell its own AI products.

Antitrust and regulatory, the largest legal overhang.

• US Search (DOJ and state AGs). The District Court for D.C. ruled against Google in August 2024; a final judgment entered December 2025 imposes restrictions on how Google distributes its services and requires it to share certain search data with, and offer syndication services to, certain competitors. Google appealed in January 2026 and moved to pause implementation; the DOJ and state AGs cross-appealed in February 2026.
• US Ad tech. In April 2025 the Eastern District of Virginia found Google's publisher tools unfairly excluded rivals (while clearing its advertiser tools and the DoubleClick/AdMeld acquisitions). A remedies proceeding was held September 2025 with closing arguments in November 2025; final judgment is pending. The DOJ's remedy proposal includes structural remedies that could have a material adverse effect. A parallel Texas-led state AG case follows the remedies decision. No loss estimate is possible.
• EC ad tech. A €3.0 billion fine for self-preferencing (September 2025), appealed November 2025; a $3.5 billion charge was recognized in Q3 2025 and bank guarantees posted in lieu of cash.
• EC Android. The €4.3 billion 2018 fine, reduced to €4.1 billion in 2022; Google's final appeal was denied in July 2026.
• EC AdSense for Search. €1.5 billion fine annulled by the General Court in September 2024; the EC's appeal is pending.
• Digital Markets Act. Two EC non-compliance investigations (Google Play and Search) with preliminary findings of non-compliance issued March 2025.
• Google Play / Epic. A 2023 jury verdict and October 2024 remedies decision altered Android and Play business models; a March 2026 settlement with Epic was followed by a July 2026 joint withdrawal of the motion to modify the injunction, leaving Google complying with the 2024 remedies.
• Private and collective actions overlapping regulatory claims are pending across the US and Europe.

Privacy and data regulation. GDPR and UK GDPR, a growing patchwork of US state comprehensive-privacy, biometric, children's-data, and IoT laws, the EU Digital Markets Act (consent for cross-product data combination, mandated search-data sharing, and, per the 10-Q update, interoperable access to Android for third-party AI companies), and the EU Data Act. Cross-border data transfer mechanisms remain legally unsettled.

Broader regulation. The EU AI Act (fully applicable after a two-year transition), AI legislation in Brazil, India, Japan, South Korea, Singapore, and Vietnam, and over 1,000 US state AI bills considered in 2025 including California's Transparency in Frontier Artificial Intelligence Act and New York's Responsible AI Safety and Education Act. Content-moderation regimes (EU Digital Services Act, Florida SB 7072, Texas HB 20, UK/Singapore/Australia laws) and erosion of Section 230 / DMCA safe harbors.

Tax. OECD 15% global minimum tax adoption outside the US could raise the effective rate and cash taxes, notwithstanding the January 2026 "Side-by-Side Safe Harbor" exempting US operations of US-parented companies. A 1% US excise tax applies to share repurchases and could rise. Digital services taxes proliferate.

Investment-portfolio volatility. Gains and losses on non-marketable equity securities flow through OI&E, and Alphabet explicitly warns this "increases the volatility of our OI&E." Fair-value measurement of private holdings uses subjective, unobservable inputs; recorded remeasurement gains may differ significantly from what is ultimately realized. (This risk is no longer theoretical, see the current quarter below.)

Financing and dilution, new emphasis in the 10-Q. The 10-K flagged that difficulty accessing capital markets or managing indebtedness, including obligations under leases, backstops, and guarantees, could restrict investment and reduce flexibility. The 10-Q broadens this to equity: it adds the ATM Program and derivative securities to the financing channels, and adds "the dilutive impact of current or future equity issuances" as something that could harm financial condition and depress the stock price. A new standalone risk factor states that ATM sales, conversion of the mandatory convertible preferred stock, or share-settled preferred dividends could dilute existing holders and depress the market price of Class A and Class C stock, including through hedging and arbitrage activity around the preferred, with no assurance any depression would be short-term. It also notes that if Alphabet is repurchasing shares at the time of an equity offering it may be required to suspend repurchases.

Other named risks. Manufacturing and supply-chain concentration (single- or limited-source components, contract manufacturers, tariffs, sanctions, export controls); IT and communications systems failure, including state-sponsored attacks and data centers in earthquake zones; problematic content, web spam, and content farms degrading search quality; data privacy and security incidents; dependence on unimpeded internet access; international operations (approximately 52% of 2025 revenues were international) and FX; IP protection, including the risk that "Google" becomes generic; brand damage; execution risk on acquisitions, joint ventures, investments, and divestitures; operating-result volatility; and key-person dependence on Sundar Pichai.

Ownership structure. Dual-class concentration limits other stockholders' ability to influence corporate matters, and non-voting Class C issuance (including for acquisitions and employee equity) preserves that concentration.

Management's discussion and analysis, fiscal year 2025

From the FY2025 10-K, accession 0001652044-26-000018.

Full-year results

Revenue by line (2024 → 2025): Google Search & other $198,084M → $224,532M; YouTube ads $36,147M → $40,367M; Google Network $30,359M → $29,792M; Google advertising $264,590M → $294,691M; subscriptions, platforms, and devices $40,340M → $48,030M; Google Services total $304,930M → $342,721M; Google Cloud $43,229M → $58,705M (+36%); Other Bets $1,648M → $1,537M.

Search & other grew $26.4 billion on more search queries (user adoption and mobile usage), higher advertiser spending, and ad format/delivery improvements. YouTube ads grew $4.2 billion, led by direct response. Google Network declined $567 million on lower AdSense, partly offset by AdMob. Subscriptions, platforms, and devices grew $7.7 billion, driven by paid subscription growth at YouTube services and Google One. Cloud grew $15.5 billion, driven by Google Cloud Platform infrastructure and platform services. Monetization metrics: paid clicks +6%, cost-per-click +7%; Network impressions −7%, cost-per-impression +7%. Geography: US 48%, EMEA 29%, APAC 17%, Other Americas 6%.

Costs. TAC $54,900M → $59,926M; other cost of revenues $91,406M → $102,609M. The TAC rate fell from 20.7% to 20.3%, driven by mix shift away from Google Network toward Search & other; rates within each channel were substantially consistent. Other cost of revenues rose on YouTube content acquisition, depreciation, and technical-infrastructure operations. R&D $49,326M → $61,087M (+$11.8B), driven by $6.9B more employee compensation, including $4.2B more SBC, itself inflated by a valuation-based Waymo compensation charge, and $2.4B more depreciation. Sales and marketing $27,808M → $28,693M. G&A $14,188M → $21,482M, up $7.3 billion almost entirely on $6.2 billion more legal-and-other expense, largely the $3.5 billion EC fine accrued in Q3 2025 and a $1.4 billion legal accrual in Q2 2025.

Segment operating income (2024 → 2025): Google Services $121,263M → $139,404M (+$18.1B); Google Cloud $6,112M → $13,910M (+$7.8B); Other Bets −$4,444M → −$7,515M; Alphabet-level activities −$10,541M → −$16,760M. The Other Bets loss widened primarily on the Waymo valuation-based compensation charge ($2.1 billion recognized in Q4 2025). Alphabet-level activities, shared AI R&D, grew 59% year over year and is now the second-largest drag on consolidated operating income after cost of revenues.

Below the line. OI&E of $29,787M included $24,080M of net gains on equity securities, mostly unrealized marks on non-marketable holdings. Effective tax rate rose from 16.4% to 16.8% on a smaller Foreign Derived Intangible Income deduction and a non-deductible EC fine and US legal settlement, partly offset by prior-period position changes. The July 4, 2025 US tax law change allows immediate expensing of domestic R&E and accelerated depreciation on eligible capex, reflected in 2025 operating cash flow.

Cash and capital. Operating cash flow $125,299M → $164,713M. Investing outflow widened from $45,536M to $120,291M on property and equipment purchases and lower marketable-securities maturities. Financing outflow narrowed from $79,733M to $37,388M on more debt issuance and fewer buybacks. Capex was $91.4 billion. Cash, equivalents, and short-term marketable securities were $126.8 billion at year-end 2025. Senior unsecured notes outstanding rose from $11.9 billion to $48.5 billion; 2025 issuance raised $37.3 billion net. Alphabet repurchased 240 million shares for $45.4 billion; $69.5 billion remained under the April 2025 $70.0 billion authorization. Dividends totaled $4.8 billion (Class A), $703 million (Class B), and $4.5 billion (Class C), after an April 2025 increase of 5% to $0.21 per share.

Obligations disclosed at year-end 2025. Purchase commitments and other contractual obligations of $149.1 billion ($113.0 billion short-term, mostly technical infrastructure and inventory orders). Backstops via financial guarantees and credit derivatives with maximum future payments of $5.7 billion and $16.9 billion respectively. Short-term accrued legal and regulatory fines and settlements of $15.6 billion, primarily EC fines. Long-term income taxes payable of $9.5 billion. Multi-year non-cancellable power purchase agreements without minimum dollar commitments are not quantified.

Management's stated trends

Alphabet named these as the long-term forces shaping results: expanded AI offerings changing monetization models and margin trends; growth of non-advertising revenue at structurally lower margins; significantly increased technical infrastructure investment in 2026 relative to 2025, with depreciation, energy, equipment, and network capacity costs expected to increase significantly because AI serving requires more compute than legacy products; continued R&D and acquisition spend; TAC growing in dollars while the TAC rate declines on channel mix; continued use of debt, finance leases (primarily data centers), and credit support such as backstops and guarantees; and an evolving regulatory environment that has already produced fines and business-practice changes.

Critical accounting estimates most exposed to judgment: fair-value measurement of non-marketable equity securities (market/income approaches with unobservable inputs), useful lives of property and equipment (revised prospectively), income taxes and uncertain positions, and loss contingencies.

Current quarter, three and six months ended June 30, 2026

From the 10-Q for the quarter ended June 30, 2026, accession 0001652044-26-000071, and the results release furnished on Form 8-K July 22, 2026, accession 0001652044-26-000066.

Headline

Six-month revenues were $229,692M versus $186,662M; six-month operating income $80,466M versus $61,877M; six-month OI&E $135,699M versus $13,845M.

Revenue growth was 23% in constant currency, the twelfth consecutive quarter of double-digit growth. Employees rose to 198,933 from 187,103 a year earlier.

What changed

Cloud is the story. Google Cloud revenues rose 82% to $24,768M (from $13,624M), and Cloud operating income rose from $2,826M to $8,814M, a 35.6% segment margin versus 20.7% a year ago. Growth came from Google Cloud Platform across enterprise AI solutions and infrastructure plus core GCP, and, newly, from product sales of TPU systems: Alphabet has signed a limited number of agreements to supply TPU systems to customers requiring on-premises infrastructure for specialized high-scale workloads, began recognizing revenue in Q2 2026, and expects the significant majority of that revenue to be recognized in 2027. Inventory on the balance sheet jumped from $2,439M to $9,991M over six months, consistent with hardware being built for delivery.

Revenue backlog of $519.5 billion, of which $513.9 billion is Google Cloud, just over 50% expected to convert to revenue within 24 months. (Note that in Q1 2026 Alphabet changed its backlog reporting to also include contracts with an original expected term of one year or less, so this figure is not comparable to earlier-basis disclosures.)

Services. Google Services revenues rose 15% to $94,540M; segment operating income rose $6.5 billion to $39,544M. Search & other rose $9.1 billion to $63,271M on query growth, advertiser spending, and ad format improvements; management attributes query growth to AI features in Search. YouTube ads rose $1.3 billion to $11,055M on direct response. Google Network fell $51 million to $7,303M on AdSense weakness. Subscriptions, platforms, and devices rose $1.7 billion to $12,911M on YouTube and Google One paid subscriptions. Monetization metrics: paid clicks +13%, cost-per-click +3%; Network impressions −12%, cost-per-impression +13%. Geographic mix shifted toward the US, 51% of revenue versus 48% a year ago.

Costs. TAC $16,179M (+$1.5B); the TAC rate fell from 20.6% to 19.8% on Network-to-Search mix. Other cost of revenues rose $5.4 billion on depreciation, inventory and other costs, YouTube content acquisition, and infrastructure operations. R&D rose $4.4 billion to $18,219M (employee compensation +$2.9B, depreciation +$592M). Sales and marketing rose $1.3 billion to $8,403M on advertising and promotion. G&A rose $1.3 billion to $6,461M, including a $1.5 billion charge related to a legal matter. Alphabet-level activities, shared AI R&D, widened from −$3,372M to −$5,789M. Other Bets loss widened to −$1,799M.

OI&E dominates reported earnings and is almost entirely non-cash. Net gains on equity securities were $99,031M in the quarter and $135,946M for the half, "primarily related to unrealized gains in our equity securities portfolio from SpaceX and a private company." As of June 30, 2026, marketable equity securities include $80.0 billion of SpaceX shares subject to short-term sale restrictions plus $14.1 billion of SpaceX shares restricted through the third quarter of 2027 (held in other non-current assets). The carrying value of non-marketable equity securities under the measurement alternative was $124.3 billion, of which $87.9 billion was remeasured to fair value during the quarter and was primarily Level 2 at the time of measurement; total initial cost of that book is $47,642M. Interest expense rose from $261M to $1,278M as debt scaled. The effective tax rate rose from 16.9% to 19.1%, attributed to higher pre-tax earnings from unrealized equity gains taxed at the statutory rate as deferred tax liabilities, deferred income tax liabilities on the balance sheet went from $919M to $22,819M in six months. Investors should read operating income, not net income, as the measure of the operating business this quarter.

Capital spending. Capex was $44.9 billion in the quarter and $80.6 billion for the six months, versus $39.6 billion in the prior-year half, more than doubling. Depreciation was $13.6 billion for the half. Property and equipment, net rose from $246.6 billion to $321.2 billion in six months, with assets not yet in service rising from $78.6 billion to $122.8 billion. Alphabet reiterates it expects to significantly increase 2026 technical infrastructure investment relative to 2025. Accrued purchases of property and equipment nearly doubled to $16,196M, and property and equipment in accrued liabilities and payables was $29,113M.

The balance sheet transformed. Total assets went from $595.3 billion to $922.0 billion in six months. Cash, equivalents, and marketable securities went from $126.8 billion to $242.5 billion. Long-term debt went from $46.5 billion to $98.2 billion (face value $101.1 billion). Goodwill went from $33.4 billion to $57.8 billion and intangibles from $1.3 billion to $9.1 billion, both from the Wiz acquisition. Total stockholders' equity went from $415.3 billion to $640.5 billion.

Financing, the defining event of the quarter. Alphabet raised capital across every instrument available:

• Debt: $20.0 billion of US-dollar senior unsecured notes and $31.8 billion of foreign-currency notes issued during the six months, Q1: $20.0 billion USD (weighted-average 4.80% coupon, 15-year), £5.5 billion (5.31%, 31-year), CHF 3.1 billion (1.06%, 10-year); Q2: €9.0 billion (3.90%, 13-year), C$8.5 billion (4.35%, 15-year), ¥576.5 billion (2.65%, 8-year). Proceeds from debt issuance, net of costs, were $56,226M for the half. $11.7 billion of credit facilities with $1.3 billion drawn; $25.0 billion commercial paper program undrawn.
• Common equity: On June 4, 2026 Alphabet completed an underwritten public offering of 29 million Class A shares at $355.1982 and 29 million Class C shares at $351.8018, for $20.5 billion net, and concurrently a $10.0 billion private placement of 14 million Class A and 14 million Class C shares to an affiliate of Berkshire Hathaway Inc., with registration rights to register resale.
• Preferred: On June 5, 2026 Alphabet issued 385 million Series A and Series B depositary shares representing 19 million shares of 6.25% Mandatory Convertible Preferred Stock (Series A indexed to Class A, Series B to Class C), $1,000 liquidation preference per share ($50 per depositary share), for $19.0 billion net. Dividends are cumulative, payable quarterly in cash or shares at Alphabet's election, starting August 15, 2026 and running through May 15, 2029. Mandatory conversion on or about May 15, 2029 at 2.2520–2.8160 Class A shares (Series A) or 2.2740–2.8420 Class C shares (Series B) per preferred share. Alphabet paid a $1.0 billion premium for capped call transactions with an initial cap price of $532.6704 (Class A) and $527.7974 (Class C), a 50% premium, to blunt conversion dilution.
• ATM: On June 1, 2026 Alphabet entered an equity distribution agreement for up to $40.0 billion of Class A and Class C stock, intended primarily to fund tax obligations on employee equity grants. None sold as of June 30, 2026.

Aggregate equity capital raise: $49.6 billion net, earmarked for general corporate purposes "including capital expenditures to scale AI infrastructure and global compute." Financing activities swung from a $26.0 billion outflow in the prior-year half to an $86.3 billion inflow.

Capital returns paused. There were no share repurchases in the three or six months ended June 30, 2026 (versus $28.3 billion of repurchases in the prior-year half); $69.5 billion remains authorized. The common dividend was raised 5% to $0.22 per share in April 2026. Six-month common dividends: $2.5 billion Class A, $359 million Class B, $2.4 billion Class C.

Off-balance-sheet and forward obligations expanded dramatically. Purchase commitments and other contractual obligations totaled $811.0 billion at June 30, 2026 ($200.7 billion short-term) versus $149.1 billion six months earlier, primarily technical infrastructure and inventory under long-term supply agreements and open purchase orders, plus content licenses and energy take-or-pay contracts (terms of two to 26 years, obligations through 2054). The commitments note gives $707.0 billion of expected future fixed or guaranteed commitments under contracts with remaining terms greater than one year, the significant majority long-term supply agreements. Separately:

• Backstops via financial guarantees of $7.6 billion and credit derivatives of $43.8 billion maximum future payments (from $5.7 billion and $16.9 billion at year-end 2025).
• An agreement to provide an estimated $24.1 billion of additional future backstops for data center and energy infrastructure build-out, subject to finalizing terms.
• $20.0 billion of future capital funding commitments to a private company, contingent on operational and financial milestones through 2030, accounted for as an equity derivative. Total future funding commitments to unconsolidated VIEs rose from $1.1 billion to $21.9 billion.
• Undiscounted future payments on leases not yet commenced of $85.2 billion, primarily data centers, commencing 2026–2031 with terms of one to 26 years, plus a June 2026 short-term lease with an approximately $5.8 billion non-cancelable commitment commencing in Q3 2026.
• Short-term accrued legal and regulatory fines and settlements of $17.4 billion (from $15.6 billion).

Acquisitions and divestitures completed in the half.

• Wiz closed March 11, 2026 for $29.5 billion after purchase price adjustments (below the $32.0 billion announced), excluding post-combination compensation. Allocation: $8,300M intangibles ($3,600M patents and developed technology, 7-year life; $4,500M customer relationships, 10-year; $200M trade names and other), $22,705M goodwill (not tax-deductible), $(1,538)M net liabilities assumed. Reported within Google Cloud.
• Intersect (renewable energy developer) closed March 10, 2026 for $5.9 billion after adjustments (announced at $4.8 billion cash plus assumed debt). Allocation: $2,174M goodwill, $5,129M property and equipment, $(1,214)M debt, $(221)M net liabilities. Intersect is a consolidated VIE; results allocated across segments.
• GFiber, March 2026 definitive agreement to contribute Alphabet's ownership interest into a newly formed entity in exchange for $1.5 billion cash, a $2.0 billion note receivable, and a 49.99% equity interest; the retained stake will be an unconsolidated VIE under the equity method. GFiber is classified held for sale (property and equipment of $7.1 billion in other current assets), depreciation ceased, no impairment on classification, results remain in Other Bets until close. Expected to close in late 2026.

Legal developments in the quarter. Alphabet recognized $2.1 billion of charges related to the Stockholm Patent and Market Court decision in the PriceRunner (a Klarna subsidiary) private action over the display and ranking of shopping search results, $1.5 billion of principal damages in G&A within Google Services and $581 million of accrued interest and costs in OI&E. Alphabet appealed. As reported in the legal note, the court awarded the plaintiff approximately $2.1 billion in principal damages plus accrued interest and costs.

Controls. Disclosure controls were concluded effective as of June 30, 2026, with no material changes to internal control over financial reporting during the quarter. Critical accounting estimates were unchanged from the 10-K except for the addition of business combinations, reflecting the Wiz and Intersect purchase price allocations.

Management's forward commentary. Alphabet does not provide numeric guidance. It reiterates that 2026 technical infrastructure investment will increase significantly relative to 2025, that the significant majority of TPU-system revenue under signed agreements will be recognized in 2027, and that it expects existing cash, short-term marketable securities, and cash flows from operations and financing to fund operations and commitments for at least the next 12 months. It is monitoring geopolitical tension, international trade, and the macroeconomic environment, and cautions that past results may not be indicative of future performance.

Subsequent events

Post-period developments disclosed in the 10-Q for the quarter ended June 30, 2026, accession 0001652044-26-000071. Alphabet did not present a separate subsequent-events note; the following are drawn from the commitments and contingencies note, the stockholders' equity note, and the executive overview.

• EC Android fine became final and was paid. On July 2, 2026 the European Commission's 2018 Android decision was upheld, the European Court of Justice denied Google's appeal of the General Court's affirmation, making the decision final. In July 2026 Alphabet made a cash payment of $5.2 billion covering the fine plus accrued interest. The amount had been previously accrued, so the cash outflow lands in Q3 2026 without a further income-statement charge.

• Stockholm court ruling against Google (PriceRunner / Klarna). In July 2026 the Stockholm Patent and Market Court ruled against Google in the private action brought by PriceRunner, a subsidiary of Klarna, over the display and ranking of shopping search results, awarding approximately $2.1 billion in principal damages (denominated in multiple currencies) plus accrued interest and costs. Alphabet recognized the charge in the second quarter of 2026, $1.5 billion of principal damages in general and administrative expenses within Google Services and $581 million of interest and costs in other income (expense), net, and has appealed.

• Epic Games injunction. In July 2026 Epic and Google jointly withdrew their motion to modify the October 2024 Google Play remedies injunction. Google is complying with the October 2024 remedies decision.

• Dividends declared July 2026. The Board declared a quarterly cash dividend of $12.15 per share on each of the Series A and Series B mandatory convertible preferred stock (approximately $0.60 per Series A and Series B depositary share), payable August 15, 2026 to holders of record as of August 1, 2026, the first payment on the preferred issued in June. It also declared a quarterly cash dividend of $0.22 per share on Class A, Class B, and Class C stock, payable September 14, 2026 to holders of record as of September 7, 2026.

• Pending divestiture, GFiber. The March 2026 agreement to contribute Alphabet's GFiber ownership interest into a newly formed entity remains outstanding and is expected to close in late 2026, delivering $1.5 billion in cash, a $2.0 billion note receivable, and a 49.99% retained equity interest. GFiber is held for sale as of June 30, 2026 with $7.1 billion of property and equipment reclassified to other current assets.

• Lease commencing after the quarter. A short-term lease entered in June 2026 with a non-cancelable commitment of approximately $5.8 billion commences in the third quarter of 2026.

• Financial guarantee backstops. Backstop agreements supporting counterparty procurement of long-lead-time equipment for future power purchase and energy agreements carry varying terms through September 2026, with maximum potential future payments of $7.6 billion as of June 30, 2026.

No acquisitions or divestitures were announced or completed between June 30, 2026 and the filing date beyond those described above, and no financings were disclosed as occurring after the balance sheet date.

Filings that contain financial statements

The following 8-K filings furnish Alphabet's quarterly earnings press release as Exhibit 99.1, which includes condensed consolidated income statements, balance sheets, and cash flow statements for the periods indicated. Readers tracing quarterly figures to source documents should look here first, since Alphabet's own 10-Q/10-K may reflect a different reporting cut for the same period.

Earnings and guidance

• Q3 2025 (accession 0001652044-25-000087, filed 2025-10-29): Revenue $102.3 billion, up 16% year over year, Alphabet's first-ever $100 billion quarter. Google Cloud revenue up 34% to $15.2 billion. Operating margin was 30.5% GAAP, but included a $3.5 billion charge tied to a European Commission fine; excluding that charge, operating margin was 33.9%. Net income up 33%, EPS $2.87 (up 35%), aided by a $12.8 billion net gain in other income from unrealized gains on non-marketable equity securities. Full-year 2025 capital-expenditure guidance was raised to a range of $91–93 billion.

• Q4 and full-year 2025 (accession 0001652044-26-000012, filed 2026-02-04): Q4 revenue $113.8 billion, up 18%. Full-year 2025 revenue exceeded $400 billion for the first time. Google Cloud Q4 revenue up 48% to $17.7 billion. Operating margin 31.6%, which included a $2.1 billion employee compensation charge tied to Waymo. Net income up 30%, EPS $2.82 (up 31%). Management guided 2026 capital expenditures to a range of $175–185 billion, citing customer demand for AI infrastructure.

• Q1 2026 (accession 0001652044-26-000043, filed 2026-04-29): Revenue $109.9 billion, up 22%, an 11th consecutive quarter of double-digit growth. Google Cloud revenue accelerated to 63% growth, reaching $20.0 billion, with cloud backlog nearly doubling quarter over quarter to more than $460 billion. Operating margin expanded 2 points to 36.1%. Other income included a $37.7 billion net gain from unrealized gains on non-marketable equity securities. Net income up 81%, EPS $5.11 (up 82%). The board approved a 5% dividend increase, to a quarterly cash dividend of $0.22 per share.

• Q2 2026 (accession 0001652044-26-000066, filed 2026-07-22): Revenue $119.8 billion, up 24%, a 12th consecutive quarter of double-digit growth. Google Cloud revenue accelerated further to 82% growth, reaching $24.8 billion. Operating margin expanded 2 points to 34%. Other income included a $98.0 billion net gain, again primarily unrealized gains on equity securities holdings, a non-operating item that drove most of the reported profit increase. Net income available to common stockholders up 298%, EPS $9.11 (up 294%). Quarterly capital expenditures rose to $44.9 billion against quarterly operating cash flow of $39.1 billion, producing negative free cash flow of $5.9 billion for the quarter. On a trailing-twelve-month basis, capital expenditures reached $132.4 billion, but trailing-twelve-month operating cash flow of $185.7 billion kept trailing-twelve-month free cash flow positive at $53.3 billion. The step-up in quarterly capital expenditures reflects the scale-up in AI infrastructure spending, which was partly funded by capital raised in June 2026 (see below).

Capital-markets activity

Equity and preferred stock raise (June 2026), funding AI infrastructure buildout:

• On June 1, 2026, Alphabet entered an equity distribution agreement permitting sales of up to $40 billion of Class A and Class C stock through an at-the-market program (accession 0001193125-26-257724, Item 1.01).
• On June 2, 2026, Alphabet priced and agreed to sell 25,459,689 shares of Class A Common Stock at $355.1982/share and 25,459,689 shares of Class C Capital Stock at $351.8018/share; underwriters' over-allotment options for an additional 3,818,953 shares of each class were exercised in full on June 3, 2026 (accession 0001193125-26-257724, Item 8.01).
• Concurrently, on June 1, 2026, Alphabet agreed to sell 14,212,035 shares of Class A Common Stock (~$351.81/share) and 14,359,656 shares of Class C Capital Stock (~$348.20/share) directly to an affiliate of Berkshire Hathaway Inc. in a private placement, for gross proceeds of $10 billion (accession 0001193125-26-257724, Item 8.01).
• On June 2, 2026, Alphabet also priced two mandatory convertible preferred stock offerings, 6.25% Series A and 6.25% Series B Preferred Stock, each represented by depositary shares, selling 167,500,000 depositary shares of each series plus full exercise of a 25,000,000-share over-allotment option per series; both offerings closed June 5, 2026 (accession 0001193125-26-259830, Item 1.01).
• Per the Q2 2026 earnings release, the combined Class A/Class C stock and mandatory convertible preferred stock offerings raised aggregate net proceeds of $49.6 billion, earmarked for general corporate purposes including capital expenditures to scale AI infrastructure and global compute.

Senior notes offerings (debt-financed capex/general corporate purposes):

• November 6, 2025 (accession 0001193125-25-269979): Closed $17.5 billion of U.S. dollar notes and €6.5 billion of euro notes.
• February 13, 2026 (accession 0001193125-26-051423): Closed $20 billion of U.S. dollar notes and £5.5 billion of Sterling notes.
• May 11, 2026 (accession 0001193125-26-216986): Closed €9 billion of euro notes and C$9.5 billion of Canadian-dollar notes.
• May 21, 2026 (accession 0001193125-26-234488): Closed ¥576.9 billion of Japanese yen notes.

Dividend: Board approved a 5% increase to the quarterly dividend, to $0.22 per share, announced with Q1 2026 earnings (accession 0001652044-26-000043).

Governance and management

• 2026 Annual Meeting (held June 5, 2026; results filed June 11, 2026, accession 0001193125-26-267578): Shareholders re-elected the full slate of director nominees (including Larry Page, Sergey Brin, and Sundar Pichai), ratified Ernst & Young LLP as auditor, approved an amendment to the 2021 Stock Plan increasing the share reserve by 200,000,000 shares of Class C capital stock, and approved (on an advisory, "say-on-pay" basis) named-executive-officer compensation. Two shareholder proposals, for enhanced climate-goal disclosure and for a report on water usage tied to AI development, were not approved.
• CEO compensation (March 4, 2026, accession 0001652044-26-000026): The board's compensation committee approved a triennial equity award for CEO Sundar Pichai: two tranches of performance stock units with a combined target value of $126 million tied to relative total shareholder return, $84 million in time-based restricted stock units, and separate performance-based unit grants tied to Waymo LLC (target value ~$130 million) and Wing Aviation LLC (target value ~$45 million), which settle in Waymo/Wing common units based on those units' internal valuation growth. Mr. Pichai's base salary remains unchanged at $2,000,000 and he remains ineligible for an annual bonus.
• Executive equity awards (April 7–10, 2026, accession 0001652044-26-000034): The compensation committee approved performance and restricted stock unit awards for CFO Anat Ashkenazi, President and Chief Investment Officer Ruth Porat, Chief Business Officer Philipp Schindler, and Chief Legal Officer Kent Walker, including transitional grants tied to the phase-out of the SVP bonus program.
• Principal Accounting Officer changes: Amie Thuener O'Toole resigned as Vice President, Corporate Controller and Principal Accounting Officer effective April 9, 2026, with no disagreement noted (accession 0001652044-26-000031, filed 2026-04-02). Marsida Saraci, previously Vice President, Finance – Deputy Controller, was appointed Principal Accounting Officer effective June 5, 2026 (accession 0001652044-26-000059).

M&A and legal matters disclosed outside of Form 8-K

Alphabet has not disclosed any merger, acquisition, or divestiture on Form 8-K in this window. However, its Form 10-Q for the quarter ended June 30, 2026 (accession 0001652044-26-000071, filed 2026-07-23) discloses two acquisitions that closed inside the period and one pending transaction:

• Wiz: Closed March 11, 2026 for $29.5 billion after purchase price adjustments; results are reported within the Google Cloud segment.
• Intersect: A renewable energy developer, closed March 10, 2026 for $5.9 billion.
• GFiber: In March 2026, Alphabet entered a definitive agreement to contribute its GFiber ownership interest to a newly formed entity in exchange for $1.5 billion cash, a $2.0 billion note receivable, and a 49.99% equity interest in the new entity; the transaction is expected to close in late 2026.

The same Form 10-Q discloses two separate European Commission proceedings against Google, plus one other legal outcome, whose July 2026 developments are not reflected in any Form 8-K:

• European Commission / advertising technology (self-preferencing): This is the matter behind the $3.5 billion charge in the Q3 2025 earnings release, tied to a September 2025 EC decision imposing a €3.0 billion fine. Google appealed in November 2025, and that appeal remains pending; Alphabet has posted bank guarantees in lieu of paying the fine in cash.
• European Commission / Android (2018 decision): A separate, older matter. On July 2, 2026, the European Court of Justice denied Google's appeal, making the European Commission's 2018 decision (a €4.3 billion fine, reduced to €4.1 billion) final. In July 2026, Alphabet paid $5.2 billion in cash (fine plus interest), an amount it had previously accrued.
• PriceRunner: In July 2026, the Stockholm Patent and Market Court issued a decision in an action brought by PriceRunner (a Klarna subsidiary); Alphabet accrued $2.1 billion related to this matter in the second quarter of 2026 and has appealed the decision.

About this file

GOOGL annual income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Source note, FY2023. Income statement and cash flow taken from the three-year columns of the FY2025 10-K. That 10-K's balance sheet presents only December 31, 2024 and December 31, 2025, so no 2023 balance sheet is reported here.
• Balance sheet: note, FY2023. Not presented in the FY2025 10-K, which shows balance sheets only as of December 31, 2024 and December 31, 2025.

GOOGL quarterly income statement, balance sheet and cash flow

Taken from the SEC filings and normalized to actual dollars.

• Source note, 2025-06-30. Prior-year comparative column of the quarterly report for the quarter ended June 30, 2026.
• Capital expenditures note, 2026-06-30. The quarterly report for this period presents its cash flow statement on a six-month basis. These three-month figures come from the free cash flow reconciliation in Alphabet's Q2 2026 earnings release, furnished as Exhibit 99.1 to the Form 8-K filed July 22, 2026 (accession 0001652044-26-000066), which states net cash provided by operating activities of $39,069 million less purchases of property and equipment of $44,924 million, giving free cash flow of $(5,855) million for the quarter. The same reconciliation's quarterly columns sum to the six-month totals in the quarterly report.

GOOGL year-to-date income statement and cash flow

Taken from the SEC filings and normalized to actual dollars.

GOOGL trailing twelve month income statement and cash flow

Derived by AI from the figures the filings report. No filing prints these, so none of them is linked.

Adjustments

Capital structure and transactions

• June 4, 2026 equity offering: Alphabet sold 29 million Class A shares at $355.1982 and 29 million Class C shares at $351.8018 in an underwritten public offering, and concurrently placed 14 million Class A and 14 million Class C shares privately with an affiliate of Berkshire Hathaway Inc. Net proceeds were $20.5 billion from the public offering and $10.0 billion from the private placement (quarterly report for the quarter ended June 30, 2026, accession 0001652044-26-000071).
• June 5, 2026 preferred issuance: 385 million Series A and Series B depositary shares representing 19 million shares of 6.25% mandatory convertible preferred stock, liquidation preference $1,000 per share, for aggregate net proceeds of $19.0 billion. The shares convert on or about May 15, 2029 at a rate of 2.2520 to 2.8160 Class A shares (Series A) and 2.2740 to 2.8420 Class C shares (Series B). Alphabet paid a $1.0 billion premium for capped call transactions to limit the dilution, recorded as a reduction of equity (same filing).
• At-the-market program: on June 1, 2026 Alphabet entered an equity distribution agreement to sell up to $40.0 billion of Class A and Class C stock over time, primarily to fund tax obligations on employee equity grants. No shares had been sold under it as of June 30, 2026 (same filing).
• Acquisitions: Wiz closed March 11, 2026 for $29.5 billion, allocated to $8.3 billion of intangible assets and $22.7 billion of goodwill within the Google Cloud segment; Intersect, a renewable energy developer, closed March 10, 2026 for $5.9 billion. Together they are the main reason goodwill rose from $33.4 billion to $57.8 billion in the first half of 2026 (same filing).
• Pending divestiture: in March 2026 Alphabet agreed to contribute its GFiber ownership interest to a newly formed entity in exchange for $1.5 billion of cash, a $2.0 billion note receivable and a 49.99% equity interest, expected to close in late 2026. GFiber is classified as held for sale, with $7.1 billion of property and equipment reported in other current assets as of June 30, 2026 (same filing).
• Dividends: the quarterly common dividend was raised to $0.22 per share in April 2026 from $0.21. In July 2026 the board declared a $0.22 per common share dividend payable September 14, 2026 and a $12.15 per share dividend on each series of mandatory convertible preferred stock payable August 15, 2026 (same filing).
• Buybacks: no Class A or Class C shares were repurchased in the three or six months ended June 30, 2026. Of the $70.0 billion repurchase authorization approved in April 2025, $69.5 billion remained available as of June 30, 2026 (same filing).
• Debt: during the first half of 2026 Alphabet issued $20.0 billion of US dollar notes plus $31.8 billion equivalent of sterling, Swiss franc, euro, Canadian dollar and yen notes. Face value of long-term debt rose from $49.1 billion at December 31, 2025 to $101.1 billion at June 30, 2026 (same filing).

Selected operating metrics

Notes

• The annual and quarterly statement figures come from two filings: the FY2025 annual report on Form 10-K filed February 5, 2026 (accession 0001652044-26-000018) and the quarterly report on Form 10-Q for the quarter ended June 30, 2026 filed July 23, 2026 (accession 0001652044-26-000071). The three-month cash flow figures for the June 2026 quarter come from a third source, Alphabet's Q2 2026 earnings release furnished as Exhibit 99.1 to the Form 8-K filed July 22, 2026 (accession 0001652044-26-000066), because the quarterly report presents cash flow only on a six-month basis. No earlier filings were used, so annual history runs 2023-2025 for the income statement and cash flow and 2024-2025 for the balance sheet, which is exactly what the FY2025 10-K's own statement columns present.
• Every statement in both filings is labeled in millions (per-share amounts in dollars, share counts in millions). All dollar amounts here are converted to actual dollars and all share counts to actual shares.
• Gross profit is not a line item on Alphabet's income statement. It is computed here as revenues less cost of revenues, using the filings' own figures.
• Total debt is built from the filings' debt and lease notes rather than a single balance sheet line, because Alphabet reports the current portion of its notes inside accrued expenses and other current liabilities. For December 31, 2025 it is $46.5 billion of long-term debt plus $2.0 billion current portion of long-term notes plus $2.5 billion of finance lease liabilities, with no commercial paper outstanding, totaling $51.0 billion. For June 30, 2026 it is $98.2 billion plus $2.0 billion plus $2.6 billion, totaling $102.8 billion. For December 31, 2024 it is $10.9 billion plus $1.0 billion current portion plus $2.3 billion of commercial paper plus $1.7 billion of finance leases, totaling $15.9 billion. Operating lease liabilities ($16.0 billion at December 31, 2025 and $18.0 billion at June 30, 2026) are reported separately and are not included in total debt.
• The FY2025 10-K and the June 2026 10-Q present the December 31, 2025 balance sheet with slightly different groupings; the 10-Q breaks out inventory, intangible assets and non-current deferred income taxes that the 10-K included within other assets and other liabilities. The totals are identical, and this file uses each filing's own presentation for its own period.
• Other income (expense), net is unusually large in fiscal 2025 and especially in 2026. It is dominated by unrealized marks on equity investments rather than operations: $99.0 billion of net gains on equity securities in the June 2026 quarter and $135.9 billion in the first half of 2026, of which $77.5 billion and $114.2 billion respectively were gross unrealized gains on non-marketable equity securities carried under the measurement alternative. The FY2025 10-K's subsequent-event note flagged roughly $32.0 billion of such unrealized gains recognized in January 2026. Operating income is the cleaner read on the underlying business.
• The quarterly report presents its cash flow statement only for the six months ended June 30, so the cash flow statement figures appear here under the year-to-date section rather than per quarter. Three-month operating cash flow, capital expenditures and free cash flow for the June 2026 quarter are taken from the free cash flow reconciliation in Alphabet's Q2 2026 earnings release, furnished as Exhibit 99.1 to the Form 8-K filed July 22, 2026 (accession 0001652044-26-000066).
• Per-share amounts reflect Alphabet's two-class method across Class A, Class B and Class C stock; the consolidated column of the earnings-per-share note is used throughout. From the June 2026 quarter, diluted earnings per common share also reflect the if-converted effect of the mandatory convertible preferred stock, and the numerator is net income less preferred dividends.
• Free cash flow is defined here as operating cash flow less purchases of property and equipment. It is not a line item in the filings.

Uncertainties

• No balance sheet is reported for fiscal 2023 because the FY2025 10-K presents balance sheets only as of December 31, 2024 and December 31, 2025.
• Total debt is a constructed subtotal. Alphabet does not present a 'total debt' line, so the definition used here (notes payable including the current portion, commercial paper, and finance lease liabilities, excluding operating leases) is one reasonable reading; sources that include operating lease liabilities will show a larger figure.
• The $1.3 billion drawn under Alphabet's credit facilities as of June 30, 2026 is captured in the total debt figure reported here. The long-term debt table adds an 'other long-term debt' line that goes from zero at December 31, 2025 to $1,686 million at June 30, 2026, and that line sits within the $101,085 million total face value of long-term debt and therefore within the $98,165 million carrying amount on the balance sheet. Total debt is not understated on this account.
• The Wiz purchase price allocation is described as preliminary in the filing and may be revised in later periods.
• Trailing-twelve-month revenue and income are derived by arithmetic (fiscal year 2025 plus the six months ended June 30, 2026 less the six months ended June 30, 2025) rather than reported as such by the company. The trailing-twelve-month cash flow figures are not derived: operating cash flow of $185,675 million, capital expenditures of $132,402 million and free cash flow of $53,273 million are stated in the trailing-twelve-month column of the free cash flow reconciliation in the Q2 2026 earnings release (accession 0001652044-26-000066).

Company details

Fiscal period