Alphabet Q1 2026 Earnings: Cloud Revenue Jumps 63% as AI Spending Ramps Up
Alphabet's revenue and profit rose sharply from a year ago, powered by fast-growing cloud and AI-driven search, while the company raised its 2026 infrastructure spending plans.
| Q1 2026 | Reported |
|---|---|
| EPS | $5.11 |
| Revenue | $109.90B |
Figures as reported by the company to the SEC for the quarter ended March 31, 2026. Analyst estimates are not part of a filing, so no comparison to expectations is shown.
Key takeaways
- Total revenue was $109.9 billion for the quarter, up 22% from $90.2 billion a year earlier — one of the company’s fastest growth rates in recent years.
- Earnings per share came in at $5.11. A meaningful part of net income reflected $36.9 billion in unrealized gains on the company’s equity investments — a non-cash accounting item tied to the market value of stakes Alphabet holds in other companies, not from core business operations.
- Google Cloud was the standout segment: revenue rose 63% year-over-year to about $20 billion, and the backlog of signed-but-not-yet-delivered contracts nearly doubled from the prior quarter to more than $460 billion, pointing to strong future demand for AI computing capacity.
- Advertising remained the core moneymaker: Search and other revenue grew 19% to $60.4 billion and YouTube ads grew 11% to $9.9 billion, with Alphabet crediting new AI-powered search features for driving higher usage and record query volume.
- Alphabet raised its planned 2026 capital spending (mostly data centers, servers and other AI infrastructure) to a range of $180-190 billion, up from the $175-185 billion it had previously guided to, and said 2027 spending is expected to rise significantly further.
- CEO Sundar Pichai said AI investment and the company’s ‘full stack’ approach — owning everything from chips to cloud to apps — are contributing across the business, citing strong Search growth and cloud demand.
- The company’s underlying profitability stayed high on a trailing-twelve-month basis, with an operating margin around 33% and a net margin near 55%, indicating Alphabet continues to convert a large share of revenue into profit even as it ramps up AI-related spending.
Q1 2026 in context
| Metric | Mar 2026 | Mar 2025 | Change |
|---|---|---|---|
| Revenue | $109.9B | $90.2B | +21.8% |
| Net income | $62.6B | $34.5B | +81.2% |
| Free cash flow | $10.1B | $19.0B | -46.6% |
| Diluted EPS | $5.11 | $2.81 | +81.9% |
| Gross margin | 62.4% | 59.7% | +2.7 pts |
| Operating margin | 36.1% | 33.9% | +2.2 pts |
| Net margin | 56.9% | 38.3% | +18.7 pts |
Figures for the quarter ended Mar 2026 and the quarter ended Mar 2025, as reported to the SEC.
Each company's quarter ending in calendar Q1 '26, as reported to the SEC. A peer that reported no revenue figure for that quarter is left out.
How the stock took it
Alphabet Inc. closed at $349.94 on Apr 29, 2026, the last session before the report, and at $385.69 on May 1, 2026, the first session after it — +10.2% across the report.
| Earlier report | Close before | Close after | Change |
|---|---|---|---|
| Oct 30, 2025 | $274.57 | $281.19 | +2.4% |
Closes from the market's daily record. Each figure spans the report date — from the last session that closed before it to the first that closed after — because a company may report before the open or after the close.
Sources: company report · earnings call