Google reported $119.8 billion in revenue for the second quarter of 2026, up 24% year-over-year and surpassing analyst expectations. The company’s Search business remained its largest segment, generating $63.3 billion in revenue during the quarter [1].
Google Cloud revenue surged 82% to $24.8 billion, driven by strong demand for AI-based products and infrastructure. Analyst Gene Munster of Deepwater Asset Management called the Cloud revenue increase "the most important number and it was a massive beat" [2].
YouTube ads contributed $11.1 billion in revenue, growing more than 12% compared to the previous quarter [1].
Despite strong top-line growth, Alphabet reported a negative free cash flow of $5.8 billion for the first time ever. This was caused by capital expenditures on AI infrastructure reaching $44.9 billion in Q2 2026. Around 60% of the quarter’s infrastructure spending was directed to AI servers, with Google also relying more on third-party cloud providers to meet demand [1, 3]. Finance chief Anat Ashkenazi said, "The higher spending reflects an accelerated rollout of computing capacity. We’re still in a supply-constrained environment and seeing very strong demand both from external cloud customers as well as across the business." She added that leaning on third-party providers will create "modest margin pressure in the near term" but help grow the customer base and capture more value [3].
Alphabet plans to increase its full-year 2026 capital expenditures forecast to between $195 billion and $205 billion, up from a previous estimate of $180 billion to $190 billion [1, 3].
On the user front, Google's Gemini AI app reached 950 million monthly active users in Q2 2026, up from 750 million in the fourth quarter of 2025 and 650 million in October 2025. Gemini’s daily active users have tripled over the past year [2, 4, 3]. New Gemini models released include Gemini 3.6 Flash, which improves coding tasks while being more cost-efficient [4]. CEO Sundar Pichai said Alphabet’s AI investments are "redefining what’s possible across every part of our business," leveraging a "full-stack approach to AI delivering real, measurable value" to consumers [2].
Gemini’s monthly user base is approaching but still below OpenAI’s ChatGPT, which stands at about 1 billion monthly users [4].
Alphabet also earned roughly $97.8 billion from other income sources, mainly equity securities including investments in Anthropic and SpaceX [2].
Google will continue investing heavily in AI infrastructure and expects spending to remain elevated throughout 2026 as demand for its AI products and Cloud services grows.
