Google’s parent company, Alphabet (GOOGL), delivered a stunning first-quarter earnings report for fiscal year 2026 after the market closed on April 29, Eastern Time. The report showed that Alphabet achieved a dual leap in both revenue and profit for the quarter. Total revenue climbed to $109.9 billion, a 22% increase year-over-year, significantly surpassing market expectations of $107.2 billion. Diluted earnings per share came in at $5.11, up 82% from $2.81 in the same period last year, far exceeding the analyst consensus range of $2.63 to $2.68. The consolidated operating margin also expanded from 33.9% to 36.1%.
As the most dazzling growth driver in the earnings report, Google Cloud’s performance officially signaled its entry into a mature profitability phase. Quarterly revenue reached the $20 billion mark for the first time, representing a year-over-year growth rate of 63.4%, far surpassing the $12.26 billion recorded in the same period last year. The segment’s operating profit soared from $2.18 billion a year ago to $6.6 billion, while the operating margin rose significantly from 17.8% to 32.9%.
In terms of traditional core business, the Google Services segment performed solidly, with total revenue reaching $89.6 billion, a 16% increase year-over-year. Among this, core search and other related businesses generated $60.4 billion in revenue, a 19.1% increase, setting a new all-time high for query volume. CEO Sundar Pichai specifically emphasized that the deep integration of AI-powered generative search experiences has significantly boosted user engagement and usage frequency. Meanwhile, YouTube advertising revenue contributed $9.88 billion, growing 10.7%. The segment covering subscriptions, platforms, and devices saw revenue increase to $12.38 billion, a year-over-year increase of 19.3%, with total paid subscribers reaching 350 million. These data points indicate that while Google ramps up AI innovation, its traditional advertising and subscription ecosystem continues to maintain deep defensive moats.
Facing aggressive capital expenditure demands, Alphabet has demonstrated a balanced strategy of prudence and ambition. The company’s capital expenditure for the quarter was $35.67 billion, primarily used to build next-generation AI data centers and underlying computing hardware. It reaffirmed its full-year 2026 capital expenditure guidance in the range of $175 billion to $185 billion, even hinting that it could reach $190 billion. To reward investors, the board announced a 5% increase in the quarterly dividend to $0.22 per share and authorized a new $70 billion share repurchase program. Notably, just before the earnings release, Google further solidified its leading position by investing an additional $40 billion in Anthropic and unveiling its eighth-generation TPU.
