Alphabet (GOOGL) earnings preview: what to watch in Q3 2026

Alphabet will report its third-quarter 2026 results (the three months to September 30) on Wednesday, October 28, 2026. The date comes from Alphabet's own investor-relations announcement of its Q3 2026 results conference call.

What last quarter showed

Our Q2 2026 analysis found three separate stories in one quarter:

• The core business grew fast. Revenue rose 24.2% to $119.8 billion and operating income (what the businesses themselves earned, before investment gains, interest and tax) rose 30.4% to $40.8 billion, an operating margin of 34.0%. Google Search & other revenue grew 16.8% to $63.3 billion, on 13% more paid clicks and a 3% higher cost-per-click.
• Google Cloud nearly doubled. Cloud revenue rose 81.8% to $24.8 billion and its operating margin jumped from 20.7% to 35.6%. Part of that growth came from things Q2 2025 did not have: Wiz, the security company bought in March, and the first sales of Alphabet's own AI chip systems (TPUs).
• Net income was mostly a paper gain. Net income rose 298% to $112.2 billion and diluted EPS to $9.11, but $99.0 billion was an unrealized gain on SpaceX and a private stake. Nothing was sold. Taking those gains out of both years, pre-tax income grew about 22%.

The cash side moved the other way. Q2 capital spending of $44.9 billion was larger than the $39.1 billion of cash the operations brought in, first-half free cash flow (operating cash flow minus capital spending) fell to $4.3 billion from $24.3 billion, and Alphabet bought back no stock, raising about $101 billion of new debt and equity instead.

What management has said about the year

A 10-Q carries no revenue or earnings outlook. The only forward statement our Q2 report found was that "in 2026, we expect to significantly increase, relative to 2025, our investment in our technical infrastructure." The filing gave no updated capex figure, so the Q3 call is the first chance to see whether that number has moved.

Three things to watch in Q3

1. Does Cloud's margin hold near 35.6%? Q3 is the second quarter with both Wiz and TPU sales, while the year-ago quarter had neither, so Cloud's growth rate will still look inflated. Alphabet does not split TPU hardware from rented computing, so the margin is the cleaner test. Hardware sales usually pull a services margin down; if Cloud stays around 35% as TPU sales grow, the core platform is getting more profitable. Inventory, mostly TPU hardware, rose from $2.4 billion to $10.0 billion in six months, and Q3 should show whether that stock is turning into sales.

2. Capex against operating cash flow. In Q2, capex beat operating cash flow by about $5.8 billion. Q3 cash flow also carries the $5.2 billion European Commission Android fine and interest paid in July, which had already been booked as an expense but had not left the bank. A second quarter of capex above operating cash flow, with buybacks still at zero, would confirm that outside funding is now part of how Alphabet pays for the build-out. Watch depreciation too: it rose 43% in the first half while capex doubled, and it will keep climbing as new data centers switch on.

3. Search paid clicks. The 13% rise in paid clicks was the strongest sign in Q2 that AI answers are not yet eating the ad-bearing results page. A slowdown well below that, with cost-per-click still near +3%, would be the first real evidence of pressure on the business that funds everything else.

One thing not to over-read: EPS. Alphabet's SpaceX shares are now marked to a market price every quarter and its private holdings are carried at $124.3 billion, so net income can swing by tens of billions either way. Judge the quarter on operating income and cash flow.

Figures are from our own Q2 2026 analysis of Alphabet's 10-Q. This note is for information only and is not investment advice.