Alphabet Inc. (GOOGL) · Material Event (8-K) SEC Filing

EX-99.1 2 googexhibit991q22026.htm EX-99.1 DocumentExhibit 99.1Alphabet Announces Second Quarter 2026 ResultsMOUNTAIN VIEW, Calif. July 22, 2026 Alphabet Inc. (NASDAQ GOOG, GOOGL) today announced financial results for the quarter ended June 30, 2026. Consolidated Alphabet revenues increased 24%, or 23% in constant currency, to $119.8 billion, reflecting strong performance across the business and our 12th consecutive quarter of double-digit revenue growth. Google Services revenues increased 15% to $94.5 billion, led by 17% growth in Google Search other, 15% in Google subscriptions, platforms, and devices, and 13% in YouTube ads. Google Cloud saw a meaningful acceleration in growth as revenues increased 82% to $24.8 billion, led by an increase in Google Cloud Platform (GCP) across enterprise AI Solutions and enterprise AI Infrastructure, as well as core GCP services. Consolidated Alphabet operating income increased 30% and operating margin expanded by 2 percentage points to 34%. Other income reflected a net gain of $98.0 billion, primarily the result of net unrealized gains on our equity securities. Net income available to common stockholders increased 298% and EPS increased 294% to $9.11.Sundar Pichai, CEO of Google and Alphabet, said Our AI investments are redefining what s possible across every part of our business.Q2 was an amazing quarter, with Alphabet revenues growing 24% year-over-year and Google Cloud revenues accelerating to 82% growth, driven by demand for AI infrastructure and AI solutions. It s great to see wide adoption of Gemini Enterprise, with nearly 90% of the Fortune 100 using it.We have exciting momentum across the board. Our popular AI features are driving Search query growth. Gemini models now process 22 billion API tokens per minute and the Gemini App has 950 million monthly active users. We are seeing strong demand for our security solutions, and our new Gemini 3.5 Flash Cyber delivers highly cost-efficient performance at the frontier. And month over month, people turn to YouTube for major world events, with over 1.7 billion unique viewers watching World Cup-related videos during the FIFA World Cup 2026TM.These outstanding results show that our differentiated, full stack approach to AI is delivering real, measurable value for consumers, customers, and our partners globally. Q2 2026 Financial Highlights (unaudited)The following table summarizes our consolidated financial results for the quarters ended June 30, 2025 and 2026 (in millions, except for per share information and percentages). Quarter Ended June 30, 2025 2026 Revenues $ 96,428 $ 119,796 Change in revenues year over year 14 % 24 % Change in constant currency revenues year over year(1) 13 % 23 % Operating income $ 31,271 $ 40,770 Operating margin 32 % 34 % Other income (expense), net $ 2,662 $ 97,983 Net income available to common stockholders $ 28,196 $ 112,107 Diluted net income per common share $ 2.31 $ 9.11 (1) Non-GAAP measure. See the section captioned Reconciliation from GAAP Revenues to Non-GAAP Constant Currency Revenues and GAAP Percentage Change in Revenues to Non-GAAP Percentage Change in Constant Currency Revenues for more details.Q2 2026 Supplemental Information (in millions, except for number of employees unaudited)Revenues, Traffic Acquisition Costs (TAC), and Number of Employees Quarter Ended June 30, 2025 2026 Google Search other $ 54,190 $ 63,271 YouTube ads 9,796 11,055 Google Network 7,354 7,303 Google advertising 71,340 81,629 Google subscriptions, platforms, and devices 11,203 12,911 Google Services total 82,543 94,540 Google Cloud 13,624 24,768 Other Bets 373 382 Hedging gains (losses) (112) 106 Total revenues $ 96,428 $ 119,796 Total TAC $ 14,705 $ 16,179 Number of employees 187,103 198,933 Segment Operating Results Quarter Ended June 30, 2025 2026 Operating income (loss) Google Services $ 33,063 $ 39,544 Google Cloud 2,826 8,814 Other Bets (1,246) (1,799) Alphabet-level activities(1) (3,372) (5,789) Total income from operations $ 31,271 $ 40,770 (1)Alphabet-level activities primarily reflect expenses related to our shared AI research and development.Additional Information Relating to the Quarter Ended June 30, 2026 (unaudited)Equity Capital RaiseIn June 2026, we issued a combination of Class A stock and Class C stock and mandatory convertible preferred stock for aggregate net proceeds of $49.6 billion, to be used for general corporate purposes, including capital expenditures to scale AI infrastructure and global compute. Additionally, we entered into an equity distribution agreement with certain sales agents to sell up to $40.0 billion of our Class A stock and Class C stock from time to time through an At-the-Market Program (ATM Program). The proceeds of the ATM Program are primarily intended to be used to meet tax obligations associated with employee equity grants. As of June 30, 2026, we have not sold any shares under the ATM Program. Issuance of Senior Unsecured NotesIn the second quarter of 2026, we issued senior unsecured notes for net proceeds of $20.3 billion, to be used for general corporate purposes.2Preferred and Common Dividend ProgramsIn July 2026, the company's Board of Directors declared a quarterly cash dividend of $12.15 per share on each of our Series A and Series B mandatory convertible preferred stock (equivalent to approximately $0.60 per each of our Series A and Series B Depositary Shares) and a quarterly cash dividend of $0.22 per share on our Class A, Class B, and Class C stock. The mandatory convertible preferred stock dividend is payable on August 15, 2026 to stockholders of record for each of the company's Series A and Series B shares as of August 1, 2026, and the common stock dividend is payable on September 14, 2026 to stockholders of record for each of the company's Class A, Class B, and Class C shares as of September 7, 2026.Webcast and Conference Call InformationA live audio webcast of our second quarter 2026 earnings release call will be available on YouTube at https www.youtube.com watch v LzExSq9DU9w. The call begins today at 1 30 PM (PT) 4 30 PM (ET). This press release, including the reconciliations of certain non-GAAP measures to their nearest comparable GAAP measures, is also available at http abc.xyz investor.We also provide announcements regarding our financial performance, including SEC filings, investor events, press and earnings releases, and blogs, on our investor relations website (http abc.xyz investor).We also share Google news and product updates on Google's Keyword blog at https www.blog.google and News From Google page on X at x.com NewsFromGoogle, and our executive officers may also use certain social media channels, such as X and LinkedIn, to communicate information about earnings results and company updates, which may be of interest or material to our investors.Forward-Looking StatementsThis press release may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from the results predicted, and reported results should not be considered as an indication of future performance. The potential risks and uncertainties that could cause actual results to differ from the results predicted include, among others, those risks and uncertainties included under the captions Risk Factors and Management s Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2025 and our most recent Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, which are on file with the SEC and are available on our investor relations website at http abc.xyz investor and on the SEC website at www.sec.gov. Additional information will also be set forth in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2026, and may be set forth in other reports and filings we make with the SEC. All information provided in this release and in the attachments is as of July 22, 2026. Undue reliance should not be placed on the forward-looking statements in this press release, which are based on information available to us on the date hereof. We undertake no duty to update this information unless required by law.About Non-GAAP Financial MeasuresTo supplement our consolidated financial statements, which are prepared and presented in accordance with GAAP, we use the following non-GAAP financial measures free cash flow constant currency revenues and percentage change in constant currency revenues. The presentation of this financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.We use these non-GAAP financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We believe that these non-GAAP financial measures provide meaningful supplemental information regarding our performance and liquidity by excluding certain items that may not be indicative of our recurring core business operating results, such as our revenues excluding the effect of foreign exchange rate movements and hedging activities, which are recognized at the consolidated level. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management s internal comparisons to our historical performance and liquidity as well as comparisons to our competitors operating results. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business.There are a number of limitations related to the use of non-GAAP financial measures. We compensate for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures and evaluating these non-GAAP financial measures together with their relevant financial measures in accordance with GAAP.3For more information on these non-GAAP financial measures, please see the sections captioned Reconciliation from GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow and Reconciliation from GAAP Revenues to Non-GAAP Constant Currency Revenues and GAAP Percentage Change in Revenues to Non-GAAP Percentage Change in Constant Currency Revenues included at the end of this release.Contact Investor relations Media investor-relations abc.xyz press abc.xyz 4Alphabet Inc.CONSOLIDATED BALANCE SHEETS(In millions, except per share amounts) As of December 31, 2025 As ofJune 30, 2026 (unaudited) Assets Current assets Cash and cash equivalents $ 30,708 $ 55,911 Marketable securities 96,135 186,563 Total cash, cash equivalents, and marketable securities 126,843 242,474 Accounts receivable, net 62,886 69,175 Inventory 2,439 9,991 Other current assets 13,870 21,884 Total current assets 206,038 343,524 Non-marketable securities 68,687 131,461 Deferred income taxes 9,113 1,448 Property and equipment, net 246,597 321,212 Operating lease assets 15,221 17,694 Goodwill 33,380 57,828 Intangible assets, net 1,283 9,105 Other non-current assets 14,962 39,711 Total assets $ 595,281 $ 921,983 Liabilities and Stockholders Equity Current liabilities Accounts payable $ 12,200 $ 20,258 Accrued compensation and benefits 17,546 15,086 Accrued expenses and other current liabilities 55,557 73,014 Accrued revenue share 10,864 10,599 Deferred revenue 6,578 7,154 Total current liabilities 102,745 126,111 Long-term debt 46,547 98,165 Income taxes payable, non-current 9,531 11,306 Deferred income taxes 919 22,819 Operating lease liabilities 12,744 14,591 Other long-term liabilities 7,530 8,511 Total liabilities 180,016 281,503 Commitments and contingencies Stockholders equity Series A and Series B preferred stock and additional paid-in capital, $0.001 par value per share, 100 shares authorized 6.25% mandatory convertible preferred stock, 0 and 19 shares issued and outstanding allocated equally between each series with a liquidation preference of $1,000 per share 0 18,023 Class A, Class B, and Class C stock and additional paid-in capital, $0.001 par value per share 300,000 shares authorized (Class A 180,000, Class B 60,000, Class C 60,000) 12,088 (Class A 5,822, Class B 837, Class C 5,429) and 12,230 (Class A 5,868, Class B 835, Class C 5,527) shares issued and outstanding 93,126 131,371 Accumulated other comprehensive income (loss) (1,916) (2,285) Retained earnings 324,055 493,371 Total stockholders equity 415,265 640,480 Total liabilities and stockholders equity $ 595,281 $ 921,983 5Alphabet Inc.CONSOLIDATED STATEMENTS OF INCOME(In millions, except per share amounts, unaudited) Quarter Ended June 30, Year To Date June 30, 2025 2026 2025 2026 Revenues $ 96,428 $ 119,796 $ 186,662 $ 229,692 Costs and expenses Cost of revenues 39,039 45,943 75,400 87,214 Research and development 13,808 18,219 27,364 35,251 Sales and marketing 7,101 8,403 13,273 16,009 General and administrative 5,209 6,461 8,748 10,752 Total costs and expenses 65,157 79,026 124,785 149,226 Income from operations 31,271 40,770 61,877 80,466 Other income (expense), net 2,662 97,983 13,845 135,699 Income before income taxes 33,933 138,753 75,722 216,165 Provision for income taxes 5,737 26,560 12,986 41,394 Net income 28,196 112,193 62,736 174,771 Preferred stock dividends 0 86 0 86 Net income available to common stockholders $ 28,196 $ 112,107 $ 62,736 $ 174,685 Basic net income per common share $ 2.33 $ 9.23 $ 5.16 $ 14.41 Diluted net income per common share $ 2.31 $ 9.11 $ 5.12 $ 14.24 Number of shares used in basic net income per common share calculation 12,122 12,151 12,153 12,125 Number of shares used in diluted net income per common share calculation 12,198 12,309 12,245 12,274 6Alphabet Inc.CONSOLIDATED STATEMENTS OF CASH FLOWS(In millions, unaudited) Quarter Ended June 30, Year To Date June 30, 2025 2026 2025 2026 Operating activities Net income $ 28,196 $ 112,193 $ 62,736 $ 174,771 Adjustments Depreciation of property and equipment 4,998 7,104 9,485 13,586 Stock-based compensation expense 5,998 7,957 11,514 14,708 Deferred income taxes (444) 20,618 (1,596) 27,538 Loss (gain) on debt and equity securities, net (1,451) (98,999) (11,411) (135,803) Other 560 1,896 1,041 3,161 Changes in assets and liabilities, net of effects of acquisitions Accounts receivable, net (2,839) (6,541) (1,201) (6,904) Inventory (198) (6,696) (628) (7,739) Income taxes, net (9,631) 203 (2,434) 8,304 Other assets (1,281) (7,590) (2,139) (9,950) Accounts payable 553 2,330 (327) 2,090 Accrued expenses and other liabilities 3,150 6,310 (1,779) 308 Deferred revenue 136 284 636 789 Net cash provided by operating activities 27,747 39,069 63,897 84,859 Investing activities Purchases of property and equipment (22,446) (44,924) (39,643) (80,598) Purchases of marketable securities (21,417) (45,439) (39,870) (76,480) Maturities and sales of marketable securities 20,585 28,695 40,930 66,696 Purchases of non-marketable securities (1,354) (21,145) (2,312) (22,051) Maturities and sales of non-marketable securities 614 819 873 1,667 Acquisitions, net of cash acquired, and purchases of intangible assets (13) (76) (353) (33,697) Other investing activities (513) (363) (363) (1,359) Net cash used in investing activities (24,544) (82,433) (40,738) (145,822) Financing activities Net payments related to stock-based award activities (2,621) (6,573) (5,731) (12,056) Repurchases of stock (13,238) 0 (28,306) 0 Dividend payments (2,543) (2,689) (4,977) (5,231) Proceeds from issuance of common stock, net of costs 0 30,499 0 30,499 Proceeds from issuance of mandatory convertible preferred stock, net of costs 0 19,063 0 19,063 Proceeds from issuance of debt, net of costs 26,846 24,847 31,378 56,226 Repayments of debt (13,876) (3,776) (18,397) (5,253) Proceeds from sale of interest in consolidated entities, net 0 558 400 3,758 Other financing activities (400) (686) (400) (686) Net cash provided by (used in) financing activities (5,832) 61,243 (26,033) 86,320 Effect of exchange rate changes on cash and cash equivalents 401 (31) 444 (154) Net increase (decrease) in cash and cash equivalents (2,228) 17,848 (2,430) 25,203 Cash and cash equivalents at beginning of period 23,264 38,063 23,466 30,708 Cash and cash equivalents at end of period $ 21,036 $ 55,911 $ 21,036 $ 55,911 7Segment ResultsThe following table presents our segment revenues and operating income (loss) (in millions unaudited) Quarter Ended June 30, 2025 2026 Revenues Google Services $ 82,543 $ 94,540 Google Cloud 13,624 24,768 Other Bets 373 382 Hedging gains (losses) (112) 106 Total revenues $ 96,428 $ 119,796 Operating income (loss) Google Services $ 33,063 $ 39,544 Google Cloud 2,826 8,814 Other Bets (1,246) (1,799) Alphabet-level activities (3,372) (5,789) Total income from operations $ 31,271 $ 40,770 We report our segment results as Google Services, Google Cloud, and Other Bets Google Services includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. Google Services generates revenues primarily from advertising fees received for consumer subscription-based products such as YouTube TV, YouTube Music and Premium, and NFL Sunday Ticket, as well as Google One the sale of apps and in-app purchases and devices. Google Cloud includes infrastructure and platform services, applications, and other products and services for enterprise customers. Google Cloud generates services revenues primarily from consumption-based fees and subscriptions received for Google Cloud Platform services, Google Workspace communication and collaboration tools, and other enterprise services. Google Cloud generates product revenues primarily from the sale of TPU systems. Other Bets is a combination of multiple operating segments that are not individually material. Revenues from Other Bets are generated primarily from the sale of autonomous transportation services and internet services.Certain costs are not allocated to our segments because they represent Alphabet-level activities. These costs primarily include certain AI-focused shared research and development activities, including employee compensation expenses and technical infrastructure usage costs associated with the development of our general AI models corporate initiatives such as our philanthropic activities and corporate shared costs such as certain finance, human resource, and legal costs, including certain fines and settlements.Charges associated with employee severance and office space reductions are also not allocated to our segments. Additionally, hedging gains (losses) related to revenue are not allocated to our segments.8Other Income (Expense), NetThe following table presents our other income (expense), net (in millions unaudited) Quarter Ended June 30, 2025 2026 Interest income $ 1,050 $ 1,430 Interest expense (261) (1,278) Foreign currency exchange gain (loss), net (69) (160) Gain (loss) on debt securities, net 165 (32) Gain (loss) on equity securities, net(1) 1,286 99,031 Income (loss) and impairment from equity method investments, net 419 (35) Other 72 (973) Other income (expense), net $ 2,662 $ 97,983 (1)Includes all gains and losses, unrealized and realized, on equity securities. For Q2 2026, the net effect of the gain on equity securities of $99.0 billion increased the provision for income tax, net income, and diluted net income per common share by $21.9 billion, $77.1 billion, and $6.26, respectively. Fluctuations in the value of our investments may be affected by market dynamics and other factors and could significantly contribute to the volatility of OI E in future periods.Reconciliation from GAAP Net Cash Provided by Operating Activities to Non-GAAP Free Cash Flow (in millions unaudited) We provide non-GAAP free cash flow for the current quarter and trailing twelve months ( TTM ) because it is a liquidity measure that provides useful information to management and investors about the amount of cash generated by the business that can be used for strategic opportunities, including investing in our business and acquisitions, and to strengthen our balance sheet. Quarter Ended TTM Q3 2025 Q4 2025 Q1 2026 Q2 2026 Q2 2026 Net cash provided by operating activities $ 48,414 $ 52,402 $ 45,790 $ 39,069 $ 185,675 Less purchases of property and equipment (23,953) (27,851) (35,674) (44,924) (132,402) Free cash flow $ 24,461 $ 24,551 $ 10,116 $ (5,855) $ 53,273 Free cash flow We define free cash flow as net cash provided by operating activities less capital expenditures.TTM free cash flow We define trailing twelve months free cash flow as net cash provided by operating activities less capital expenditures for the most recent twelve consecutive months.Reconciliation from GAAP Revenues to Non-GAAP Constant Currency Revenues and GAAP Percentage Change in Revenues to Non-GAAP Percentage Change in Constant Currency Revenues (in millions, except percentages unaudited) We provide non-GAAP constant currency revenues ( constant currency revenues ) and non-GAAP percentage change in constant currency revenues ( percentage change in constant currency revenues ), because they facilitate the comparison of current results to historic performance by excluding the effect of foreign exchange rate movements ( FX Effect ) as well as hedging activities, which are recognized at the consolidated level, as they are not indicative of our core operating results.Non-GAAP constant currency revenues is defined as revenues excluding the effect of foreign exchange rate movements and hedging activities and is calculated by translating current period revenues using prior period exchange rates and excluding any hedging effect recognized in the current period. We calculate the percentage change in constant currency revenues by comparing constant currency revenues to the prior year comparable period revenues, excluding any hedging effect recognized in the prior period.9Revenues by GeographyComparison from the Quarter Ended June 30, 2025 to the Quarter Ended June 30, 2026 Quarter Ended June 30, 2026 % Change from Prior Period Quarter Ended June 30, Less FX Effect Constant Currency Revenues As Reported Less Hedging Effect Less FX Effect Constant Currency Revenues 2025 2026 United States $ 46,063 $ 60,846 $ 0 $ 60,846 32 % 0 % 32 % EMEA 28,262 32,501 794 31,707 15 % 3 % 12 % APAC 16,480 19,317 (351) 19,668 17 % (2) % 19 % Other Americas 5,735 7,026 297 6,729 23 % 6 % 17 % Revenues, excluding hedging effect(1) 96,540 119,690 740 118,950 24 % 1 % 23 % Hedging gains (losses) (112) 106 Total revenues $ 96,428 $ 119,796 $ 118,950 24 % 0 % 1 % 23 % (1)Total constant currency revenues of $119.0 billion for the quarter ended June 30, 2026 increased $22.4 billion compared to $96.5 billion in revenues, excluding hedging effect, for the quarter ended June 30, 2025.Comparison from the Quarter Ended March 31, 2026 to the Quarter Ended June 30, 2026 Quarter Ended June 30, 2026 % Change from Prior Period Quarter Ended Less FX Effect Constant Currency Revenues As Reported Less Hedging Effect Less FX Effect Constant Currency Revenues March 31, 2026 June 30, 2026 United States $ 53,975 $ 60,846 $ 0 $ 60,846 13 % 0 % 13 % EMEA 31,468 32,501 (453) 32,954 3 % (2) % 5 % APAC 18,288 19,317 (211) 19,528 6 % (1) % 7 % Other Americas 6,345 7,026 29 6,997 11 % 1 % 10 % Revenues, excluding hedging effect(1) 110,076 119,690 (635) 120,325 9 % 0 % 9 % Hedging gains (losses) (180) 106 Total revenues $ 109,896 $ 119,796 $ 120,325 9 % 0 % 0 % 9 % (1)Total constant currency revenues of $120.3 billion for the quarter ended June 30, 2026 increased $10.2 billion compared to $110.1 billion in revenues, excluding hedging effect, for the quarter ended March 31, 2026.Total Revenues Prior Year Comparative PeriodsComparison from the Quarter Ended June 30, 2024 to the Quarter Ended June 30, 2025 Quarter Ended June 30, 2025 Quarter Ended June 30, % Change from Prior Period Less FX Effect Constant Currency Revenues As Reported Less Hedging Effect Less FX Effect Constant Currency Revenues 2024 2025 Revenues excluding hedging effect $ 84,640 $ 96,540 $ 543 $ 95,997 14 % 1 % 13 % Hedging gains (losses) $ 102 $ (112) Total revenues $ 84,742 $ 96,428 $ 95,997 14 % 0 % 1 % 13 % 10