Alphabet Revenue Growth Accelerates as Cloud Scaling Intensifies
The technology conglomerate reported consolidated revenues of $119.8 billion for the second quarter.
Alphabet (GOOGL), the technology conglomerate, reported consolidated revenues that rose 24% year-over-year to $119.8 billion in the second quarter.
The results marked a continued acceleration in top-line growth, which had risen from 16% in the third quarter of 2025 to 18% in the fourth quarter and 22% in the first quarter of 2026. This trajectory was driven largely by a significant scaling of the company's cloud operations.
Google Cloud revenue grew 82% year-over-year to $24.8 billion. This growth rate represents a sharp increase from 34% in the third quarter of 2025, 48% in the fourth quarter, and 63% in the first quarter of 2026. Operating income for the cloud segment rose to $8.8 billion, up from $6.6 billion in the prior quarter.
Adoption of the company's generative AI tools also increased. Gemini API token processing reached 22 billion tokens per minute, compared to 19 billion in the first quarter and 10 billion in the fourth quarter of 2025. Monthly active users for the Gemini App grew to 950 million, up from 750 million in the fourth quarter of 2025.
Consolidated operating margin was 34% in the second quarter. The company increased its employee headcount to 198,933, up from 194,668 in the first quarter.
Heavy investment in infrastructure impacted liquidity. Capital expenditures rose to $44.9 billion, up from $35.7 billion in the first quarter and $27.9 billion in the fourth quarter of 2025. Consequently, free cash flow turned negative to $(5.855) billion, a decline from $10.1 billion in the prior quarter.
To support its capital requirements, Alphabet raised $49.6 billion through a combination of Class A, Class C, and mandatory convertible preferred stock in June 2026. The company also issued $20.3 billion in senior unsecured notes during the quarter.
Alphabet established a new At-the-Market program to sell up to $40.0 billion of Class A and Class C stock, primarily to meet employee equity grant tax obligations. The company maintained its quarterly cash dividend of $0.22 per share.