Alphabet Inc.
GOOGL10-Q,quarter ended Mar 31, 2026,filed Apr 30, 2026,Original on SEC.gov (opens in a new tab)
3 of 3 checkable figures match the filing, 3 of 4 risk excerpts located in the filing text, 1 withheld
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The Print
Alphabet reported Q1 2026 net income of $62.6B ($5.11 diluted EPS) on revenues of $109.9B, up 22% YoY, with net income up 81% YoY.
Revenues increased 22% YoY to $109.9B, which management attributes to an increase in Google Services revenues of $12.4B, or 16%, and an increase in Google Cloud revenues of $7.8B, or 63%. Net income increased 81% YoY to $62.6B, and OI&E, net increased $26.5B, primarily due to increases in net unrealized gains on equity securities resulting from fair value adjustments on non-marketable equity securities.
- Revenues rose 22% YoY to $109.9B, driven by Google Services revenues up $12.4B (16%) and Google Cloud revenues up $7.8B (63%), per the Executive Overview.
- Net income increased 81% YoY to $62.6B, and diluted EPS rose 82% YoY to $5.11, with OI&E of $37.7B including $36.9B of net gains on equity securities.
- Operating income rose 30% YoY to $39.7B and operating margin expanded to 36% from 34%.
- Operating cash flow was $45.8B and capital expenditures were $35.7B for the quarter.
Results That Matter
- Revenues
- Current period
- $109.9B
- Prior period
- $90.2B
- Change
- +21.8%
Revenues increased 22% YoY, which management attributes to an increase in Google Services revenues of $12.4B, or 16%, and an increase in Google Cloud revenues of $7.8B, or 63%. - Operating income
- Current period
- $39.7B
- Prior period
- $30.6B
- Change
- +29.7%
Operating income increased 30% YoY; operating margin expanded to 36% from 34%.Quote not found - Net income
- Current period
- $62.6B
- Prior period
- $34.5B
- Change
- +81.2%
Net income increased 81% YoY; OI&E, net increased $26.5B, primarily due to increases in net unrealized gains on equity securities resulting from fair value adjustments on non-marketable equity securities. - Diluted net income per share
- Current period
- $5.11
- Prior period
- $2.81
- Change
- +81.9%
Diluted EPS increased 82% YoY, exceeding the 81% net income growth, with the diluted share count at 12,238M versus 12,291M. - Basic net income per share
- Current period
- $5.17
- Prior period
- $2.84
- Change
- +82.0%
Basic EPS increased 82.0% YoY.
| Metric | Current Period | Prior Period | Change | Investor Takeaway |
|---|---|---|---|---|
| $109.9B | $90.2B | +21.8% | Revenues increased 22% YoY, which management attributes to an increase in Google Services revenues of $12.4B, or 16%, and an increase in Google Cloud revenues of $7.8B, or 63%. | |
| $39.7B | $30.6B | +29.7% | Operating income increased 30% YoY; operating margin expanded to 36% from 34%.Quote not found | |
| $62.6B | $34.5B | +81.2% | Net income increased 81% YoY; OI&E, net increased $26.5B, primarily due to increases in net unrealized gains on equity securities resulting from fair value adjustments on non-marketable equity securities. | |
| $5.11 | $2.81 | +81.9% | Diluted EPS increased 82% YoY, exceeding the 81% net income growth, with the diluted share count at 12,238M versus 12,291M. | |
| $5.17 | $2.84 | +82.0% | Basic EPS increased 82.0% YoY. |
Earnings Quality & Cash Conversion
Reported net income of $62.6B includes OI&E, net of $37.7B, which includes net gains on equity securities of $36.9B, primarily related to unrealized gains on non-marketable equity securities. Operating income of $39.7B excludes OI&E. The effective tax rate increased to 19.2% from 17.3%, primarily due to an increase in acquisition-related tax integration costs, partially offset by an increase in SBC-related tax benefits and a discrete tax benefit in connection with the deconsolidation of one of the Bets.
Operating cash flow was 0.7x net income attributable to the parent (cash conversion); free cash flow of $10.1B (derived as operating cash flow minus the absolute selected capex cash-flow amount; not an issuer-defined or discretionary-cash measure).
Value Drivers & Capital Allocation
Capital returned — dividends paid $2.5B (prior $2.4B); capital expenditures $35.7B (prior $17.2B) (selected cash-flow amount, not necessarily total capital investment).
Financing cash flow for 2026-01-01 to 2026-03-31 was an inflow of $25,077,000,000, compared with an outflow of $20,201,000,000 for 2025-01-01 to 2025-03-31. Net financing changed from an outflow to an inflow.
Period net income attributable to the parent / period-end equity, not annualized: 13.1% (prior at 2025-03-31: 10.0%); period net income attributable to the parent / period-end assets, not annualized: 8.9%.
Forward Signals
No formal earnings guidance is provided in the filing. The filing states that in 2026, we expect to significantly increase, relative to 2025, our investment in our technical infrastructure, including servers and network equipment and data centers.
Known trends
- We expect to begin recognizing revenues from these agreements later in 2026, with the significant majority to be recognized in 2027.
- As more countries enact these global minimum tax rules, our effective tax rate and cash tax payments could be affected.
Subsequent events
- In April 2026, the company's Board of Directors declared a quarterly cash dividend of $0.22 per share, representing a 5% increase from the previous quarterly dividend of $0.21 per share.
- In April, 2026, we entered into additional agreements with certain third parties to backstop certain obligations relating to third-party data centers that we expect to be accounted for as credit derivatives with notional amounts totaling approximately $15.3 billion.
Risks
Excerpts are the filing’s own words; each heading is the start of its excerpt. Selected excerpts are not a complete risk inventory.
The DOJ's remedy proposal includes structural remedies that could have a material adverse effect…
The DOJ's remedy proposal includes structural remedies that could have a material adverse effect on our business.
As of March 31, 2026, we had material purchase commitments and other contractual obligations…
As of March 31, 2026, we had material purchase commitments and other contractual obligations totaling $332.4 billion, of which $138.0 billion was short-term.
As of March 31, 2026, we provided backstops in the form of financial guarantees and credit…
As of March 31, 2026, we provided backstops in the form of financial guarantees and credit derivatives with maximum potential amount of future payments of $9.0 billion and $28.4 billion, respectively.
3 of 4 excerpts located in the filing text · 1 withheld because the evidence could not be matched
Balance Sheet & Liquidity
Leverage: Identified debt as of 2026-03-31 (carrying amount): noncurrent long-term debt of $77.5B; current portion of long-term debt of $2.0B. Not separately reported in this filing's standardized data: short-term borrowings. Total debt, net debt and debt-to-equity are therefore not stated.
Liquidity: Cash, cash equivalents, and short-term marketable securities were $126.8B as of March 31, 2026; credit facilities totaled $11.7B expiring through April 2030, of which $1.2B was outstanding, and no commercial paper was outstanding.
Cash flow: Cash flow — operating $45.8B, investing $-63.4B, financing $25.1B.
Working capital: Current assets $213.8B vs. current liabilities $111.2B (current ratio 1.92x). Prior reported balance sheet as of 2025-12-31: $206.0B vs. $102.7B (2.01x).
Maturities & covenants
- Total face value of long-term debt was $80.3B as of March 31, 2026, with maturities ranging from 2026 to 2126.
- The notes are senior unsecured obligations and rank equally with each other; fixed-rate notes may be redeemed at any time in whole or in part at specified redemption prices.
Notable Footnotes
| Item | Impact |
|---|---|
| Wiz acquisition | Completed March 11, 2026 for $29.5B, allocated to $8.3B intangible assets, $22.7B goodwill, and $1.5B net liabilities assumed; results are included within the Google Cloud segment. |
| Intersect acquisition | Completed March 10, 2026 for $5.9B, allocated to $2.2B goodwill, $5.1B property and equipment, and $1.2B debt; Intersect is a VIE and Alphabet is the primary beneficiary. |
| Revenue backlog | Revenue backlog was $467.6B as of March 31, 2026, of which $462.3B related to Google Cloud; the company elected to change reporting to include contracts with an original expected term of one year or less, approximately $7.3B. |
| Non-marketable equity securities | Carrying value of non-marketable equity securities accounted for under the measurement alternative was $101.3B as of March 31, 2026, of which $73.6B was remeasured at fair value during the quarter. |
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