Alphabet, the parent company of Google, reported a 25% year-on-year (YoY) increase in revenue to $127.6 billion for the third quarter ended September 30, 2026, compared with $102.3 billion in the year-ago period. Growth was driven by strong performance across its businesses, led by Google Cloud and Search.
Operating income rose 30% YoY to $40.6 billion, while the company reported an operating margin of 31.8%.
Sundar Pichai, CEO of Google and Alphabet, said the company had reached a half-trillion-dollar revenue run rate, with its investments in artificial intelligence (AI) supporting growth across its business.
“Our AI investments are driving overall Search query growth, including commercial queries. In fact, our year-over-year query growth rate is the highest it’s been in the last five years,” Pichai said.
Google Cloud revenue more than doubles
Google Cloud emerged as Alphabet’s fastest-growing major business in the quarter, with revenue surging 103% YoY to $30.7 billion from $15.2 billion a year earlier.
The growth was driven by demand for Google Cloud Platform’s enterprise AI infrastructure and solutions, alongside core cloud services. Sales of its tensor processing unit (TPU) systems also contributed to the increase.
The segment’s operating income more than tripled to $11.1 billion from $3.6 billion in the corresponding quarter last year, reflecting its growing contribution to Alphabet’s overall financial performance.
Pichai attributed the momentum to strong demand for AI infrastructure, solutions and TPU systems from customers across industries.
Alphabet’s AI expansion also extended to its models and consumer-facing products. The company’s first-party model application programming interfaces (APIs) were processing nearly 32 billion tokens per minute, more than four times the volume recorded a year earlier, Pichai said.
The Gemini app also crossed one billion users, which Pichai described as the fastest-growing product in Google’s history.
Search and advertising drive Google Services growth
Google Services, which includes Search, YouTube, subscriptions, platforms and devices, reported revenue of $96.3 billion, up 11% YoY from $87.1 billion.
Google Search and other revenue increased 12% to $63.4 billion from $56.6 billion in the year-ago quarter. Alphabet attributed the momentum partly to its AI investments, which have contributed to growth in Search queries, including those with commercial intent.
YouTube advertising revenue rose to $11.2 billion from $10.3 billion, while Google Network revenue edged up to $7.5 billion from $7.4 billion.
Combined, Google’s advertising businesses generated $82 billion in revenue, compared with $74.2 billion in the corresponding quarter last year.
Revenue from Google subscriptions, platforms and devices increased to $14.3 billion from $12.9 billion. Separately, YouTube Music and Premium surpassed 150 million subscribers globally, including trial users, the company said.
