The Overall Picture for Q2 2026
Key figures (quarter ended June 30, 2026, as reported)
Alphabet, the holding company for Google, reported second-quarter results covering April through June on July 22, 2026. It is worth separating the headline numbers from what sits underneath them.
Revenue Up 24%, 12 Straight Quarters of Double-Digit Growth
Start with the top line. Revenue rose 24% year over year, or 23% in constant currency, to $119.8 billion. That makes twelve consecutive quarters of double-digit growth.
"Consolidated Alphabet revenues increased 24%, or 23% in constant currency, to $119.8 billion, reflecting strong performance across the business and our 12th consecutive quarter of double-digit revenue growth." — Alphabet Q2 2026 Earnings Release, page 1, opening highlights
Operating income rose 30% to $40.770 billion, and operating margin expanded 2 points from 32% to 34%. Revenue grew faster than costs.
"Consolidated Alphabet operating income increased 30% and operating margin expanded by 2 percentage points to 34%." — Alphabet Q2 2026 Earnings Release, page 1, opening highlights
The dollar amounts appear in the financial highlights table on page 1.
"Revenues $ 96,428 $ 119,796 ／ … ／ Operating income $ 31,271 $ 40,770 ／ Operating margin 32 % 34 % ／ Other income (expense), net $ 2,662 $ 97,983 ／ Net income available to common stockholders $ 28,196 $ 112,107 ／ Diluted net income per common share $ 2.31 $ 9.11" — Alphabet Q2 2026 Earnings Release, page 1, "Q2 2026 Financial Highlights" table (the two year-over-year change rows are omitted as "…"; in millions, except per share amounts and percentages; left column is Q2 2025, right is Q2 2026)
What Is Inside the 298% Net Income Increase
This is the number most easily misread. Net income rose 298% and diluted EPS rose 294% to $9.11. The jump, however, came not from the operating business but from a $98.0 billion net gain in other income. Most of that is unrealized gains on equity securities.
"Other income reflected a net gain of $98.0 billion, primarily the result of net unrealized gains on our equity securities. Net income available to common stockholders increased 298% and EPS increased 294% to $9.11." — Alphabet Q2 2026 Earnings Release, page 1, opening highlights (two consecutive bullets)
An unrealized gain is profit that exists because the market value of a holding has risen, before anything has been sold. If share prices fall, the same mechanism records a loss. Other income a year earlier was $2.662 billion, which makes $98.0 billion an exceptional level.
To gauge how much the core business grew, the 30% increase in operating income is the closer figure. Reading business momentum off the 298% headline alone leads to the wrong conclusion.
Revenue by Segment, Search, and Cloud
Year-over-year growth by major segment
Figures as reported in Alphabet's earnings release. Bars use a 0–100% scale.
Where the growth came from says more about the business than the total does. Here are the segment figures from the supplemental information.
Google Search Revenue Up 17%
This is the number to hold against the argument that AI search is eating the core business. Google Search & other revenue rose 17% year over year to $63.271 billion. A year earlier it was $54.190 billion.
"Google Services revenues increased 15% to $94.5 billion, led by 17% growth in Google Search & other, 15% in Google subscriptions, platforms, and devices, and 13% in YouTube ads." — Alphabet Q2 2026 Earnings Release, page 1, opening highlights
Google Services overall rose 15% to $94.540 billion, and Search posted the highest growth rate within it. Pichai says popular AI features are driving Search query growth.
"Our popular AI features are driving Search query growth." — Sundar Pichai, CEO (Alphabet Q2 2026 Earnings Release, page 1)
Revenue by Segment
| Segment | Q2 2025 | Q2 2026 |
|---|---|---|
| Google Search & other | $54.190B | $63.271B |
| YouTube ads | $9.796B | $11.055B |
| Google Network | $7.354B | $7.303B |
| Subscriptions, platforms, and devices | $11.203B | $12.911B |
| Google Services total | $82.543B | $94.540B |
| Google Cloud | $13.624B | $24.768B |
| Other Bets | $0.373B | $0.382B |
These figures are quoted from the supplemental information table on page 2 of the earnings release. The same table lists 198,933 employees, up 11,830 from 187,103 a year earlier.
"Google Search & other $ 54,190 $ 63,271 ／ YouTube ads 9,796 11,055 ／ Google Network 7,354 7,303 ／ … ／ Google subscriptions, platforms, and devices 11,203 12,911 ／ Google Services total 82,543 94,540 ／ Google Cloud 13,624 24,768 ／ Other Bets 373 382 ／ Hedging gains (losses) (112) 106 ／ Total revenues $ 96,428 $ 119,796 ／ … ／ Number of employees 187,103 198,933" — Alphabet Q2 2026 Earnings Release, page 2, "Q2 2026 Supplemental Information" table (Revenues, Traffic Acquisition Costs (TAC), and Number of Employees). The Google advertising subtotal row and the Total TAC row are omitted as "…"; in millions, except number of employees; left column is Q2 2025, right is Q2 2026.
Other Bets is reported in the earnings release table as its own segment alongside Google Services and Google Cloud. Note also that adding Google Services total, Google Cloud, and Other Bets does not quite reach total revenue of $119.796 billion. As the quote above shows, the release includes a hedging gains and losses line, and total revenue is the sum after adding or subtracting it. Hedging was a gain of $106 million in Q2 2026 and a loss of $112 million a year earlier.
Within advertising, Google Network is the one line that declined, slipping from $7.354 billion to $7.303 billion.
Google Cloud Up 82%
Cloud stands out on growth rate. Google Cloud revenue rose 82% to $24.768 billion. The earnings release describes the growth as a meaningful acceleration.
"Google Cloud saw a meaningful acceleration in growth as revenues increased 82% to $24.8 billion, led by an increase in Google Cloud Platform (GCP) across enterprise AI Solutions and enterprise AI Infrastructure, as well as core GCP services." — Alphabet Q2 2026 Earnings Release, page 1, opening highlights
The driver is Google Cloud Platform, Google's cloud infrastructure. The release attributes the increase to three areas: enterprise AI Solutions, enterprise AI Infrastructure, and core GCP services.
Profit is following. Segment operating income for Google Cloud rose from $2.826 billion a year earlier to $8.814 billion, a figure that reads like revenue growth starting to convert into earnings.
"Operating income (loss): Google Services $ 33,063 $ 39,544 ／ Google Cloud 2,826 8,814 ／ Other Bets (1,246) (1,799) ／ Alphabet-level activities (3,372) (5,789) ／ Total income from operations $ 31,271 $ 40,770" — Alphabet Q2 2026 Earnings Release, page 2, "Segment Operating Results" table (in millions; left column is Q2 2025, right is Q2 2026)
AI Metrics and the Capital Raised
Business metrics cited by CEO Sundar Pichai
The earnings release also carries commentary from CEO Sundar Pichai. Here are the items he offered as background to the numbers.
The Scale of Gemini Usage
Usage was presented in terms of volume and reach. Gemini models now process 22 billion API tokens per minute, and the Gemini App has 950 million monthly active users.
"We have exciting momentum across the board. Our popular AI features are driving Search query growth. Gemini models now process 22 billion API tokens per minute and the Gemini App has 950 million monthly active users. We are seeing strong demand for our security solutions, and our new Gemini 3.5 Flash Cyber delivers highly cost-efficient performance at the frontier. And month over month, people turn to YouTube for major world events, with over 1.7 billion unique viewers watching World Cup-related videos during the FIFA World Cup 2026™." — Sundar Pichai, CEO (Alphabet Q2 2026 Earnings Release, page 1)
Demand for security solutions is described as strong, with the new Gemini 3.5 Flash Cyber delivering highly cost-efficient performance at the frontier. On YouTube, more than 1.7 billion unique viewers watched World Cup-related videos during the FIFA World Cup 2026. Gemini Enterprise gets its own mention: adoption is described as wide, with nearly 90% of the Fortune 100 using it.
"It's great to see wide adoption of Gemini Enterprise, with nearly 90% of the Fortune 100 using it." — Sundar Pichai, CEO (Alphabet Q2 2026 Earnings Release, page 1)
For the Gemini models themselves, see the Gemini 3.6 Flash explainer and the Gemini 3.5 usage guide.
Equity Raise and Note Issuance
Financing is disclosed in the release as well. In June 2026, Alphabet raised aggregate net proceeds of about $49.6 billion through a combination of Class A stock, Class C stock, and mandatory convertible preferred stock. The stated use is general corporate purposes, including capital expenditures to scale AI infrastructure and global compute. Alphabet also entered an equity distribution agreement allowing the sale of up to $40.0 billion of stock through an At-the-Market Program, with proceeds primarily intended to meet tax obligations tied to employee equity grants; no shares had been sold under it as of June 30, 2026.
"In June 2026, we issued a combination of Class A stock and Class C stock and mandatory convertible preferred stock for aggregate net proceeds of $49.6 billion, to be used for general corporate purposes, including capital expenditures to scale AI infrastructure and global compute. Additionally, we entered into an equity distribution agreement with certain sales agents to sell up to $40.0 billion of our Class A stock and Class C stock from time to time through an At-the-Market Program (ATM Program). The proceeds of the ATM Program are primarily intended to be used to meet tax obligations associated with employee equity grants. As of June 30, 2026, we have not sold any shares under the ATM Program." — Alphabet Q2 2026 Earnings Release, page 2, "Equity Capital Raise"
There was debt financing too. During the second quarter, Alphabet issued senior unsecured notes for net proceeds of $20.3 billion. The stated use here is only general corporate purposes, with no mention of AI infrastructure.
"In the second quarter of 2026, we issued senior unsecured notes for net proceeds of $20.3 billion, to be used for general corporate purposes." — Alphabet Q2 2026 Earnings Release, page 2, "Issuance of Senior Unsecured Notes"
Equity and notes together come to roughly $70 billion raised in this quarter alone.
How to Read the "AI Search Kills Google" Argument
The argument that generative AI will shrink search advertising has been running for a while. The actuals for this quarter are Search up 17% and Google Services up 15%. For the three months from April to June 2026 at least, a contraction in search advertising does not appear in the numbers.
That said, this is one quarter. Pichai's explanation is that AI features lifted search query volume, and settling whether AI replaced search or complemented it takes several quarters of data. The roughly $70 billion raised in the quarter is also large enough that the return on it cannot be judged from the earnings release alone. So this article stops at organizing the reported figures and does not extend to share prices or investment decisions.
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