Alphabet Q1 Revenue $109.9B on AI, 63% Cloud Growth

Alphabet reported $109.9 billion in revenue for the quarter ended March 31, 2026, above the $107.2 billion estimate. Diluted earnings per share were $5.11, up from $2.81 a year earlier. LSEG’s EPS estimate of $2.63 was not directly comparable with Alphabet’s reported figure. Total revenue rose 22% from $90.234 billion in Q1 2025, and constant-currency revenue grew 19%, marking the company’s 11th straight quarter of double-digit growth.

Operating income increased 30% to $39.696 billion and operating margin expanded to 36.1%. Net income was $62.578 billion, up 81% year over year. Other income totaled $37.716 billion, mainly from net unrealized gains on non-marketable equity securities. The company raised its quarterly cash dividend 5% to $0.22 per share.

Google Services revenue was $89.637 billion, a 16% increase from the prior year. Google Search and related products generated $60.399 billion, up 19%. Google advertising brought in $77.253 billion, compared with $66.885 billion a year earlier, while Google Network revenue declined to $6.971 billion from $7.256 billion. YouTube ad sales rose 11% to $9.883 billion.

Subscriptions, platforms and devices revenue climbed 19% to $12.384 billion. Alphabet said paid subscriptions reached 350 million across YouTube and Google One. Traffic acquisition costs increased to $15.228 billion from $13.748 billion.

CEO Sundar Pichai said Search benefited from AI features that lifted usage and that queries reached an all-time high. He described the quarter as the strongest yet for consumer AI plans, driven by the Gemini App.

Google Cloud revenue rose 63% to $20.028 billion from $12.260 billion a year earlier. Cloud operating income increased to $6.598 billion from $2.177 billion, with growth attributed to Google Cloud Platform, enterprise AI solutions and infrastructure services. Alphabet reported its cloud backlog nearly doubled quarter over quarter to more than $460 billion.

Other Bets revenue fell to $411 million from $450 million, and that division’s operating loss widened to $2.100 billion from $1.226 billion. Alphabet-level activities, which cover shared AI research and development expenses, recorded an operating loss of $5.391 billion versus $3.027 billion a year earlier. Hedging results swung from a $260 million gain to a $180 million loss. Headcount rose to 194,668 from 185,719.

On product metrics, Gemini Enterprise paid monthly active users grew 40% quarter over quarter. Gemini models now process more than 16 billion tokens per minute through direct customer API use, a 60% increase from the prior quarter. Waymo logged over 500,000 fully autonomous rides per week.

The company’s results showed revenue gains across Search, YouTube, paid subscriptions and enterprise cloud demand for AI infrastructure.