#Alphabet Posts 63% Cloud Growth as Backlog Nears $460 Billion
Alphabet Inc. (NASDAQ: GOOGL, GOOG) reported first-quarter 2026 revenue of $109.9 billion, a 22% increase from the same period a year earlier, as Google Cloud revenues surged 63% to $20.0 billion and the company recorded its 11th consecutive quarter of double-digit revenue growth.
The results extend a run of accelerating cloud performance that has drawn attention from enterprise technology analysts. Alphabet competes directly with Amazon Web Services and Microsoft Azure in cloud infrastructure and platform services, two segments where AI-driven workloads have become a primary growth driver across the industry.
#Google Cloud Backlog Nearly Doubles Quarter on Quarter to Over $460 Billion
Google Cloud revenue of $20.0 billion for the quarter was driven by growth across Google Cloud Platform enterprise AI solutions and enterprise AI infrastructure, as well as core platform services. The segment's contracted revenue backlog rose to over $460 billion, nearly doubling quarter on quarter, according to the company.
Google Cloud operating income reached $6.6 billion in the quarter, compared to $2.2 billion in Q1 2025, as the segment continued to scale.
#Search Revenue Rises 19% as Paid Subscriptions Reach 350 Million
Google Services revenues totalled $89.6 billion for the quarter, up 16% year over year. Google Search and other revenues rose 19% to $60.4 billion. YouTube advertising revenue increased 11% to $9.9 billion. Subscriptions, platforms, and devices revenues grew 19% to $12.4 billion.
The company said total paid subscriptions across its consumer services reached 350 million, with YouTube and Google One cited as primary contributors. Gemini Enterprise, the company's AI product for business customers, recorded 40% quarter-on-quarter growth in paid monthly active users.
"Search had a strong quarter with AI experiences driving usage, queries at an all time high, and 19% revenue growth," Sundar Pichai, CEO of Alphabet and Google, said in the earnings release. "Google Cloud revenues grew 63% with backlog nearly doubling quarter on quarter to over $460 billion."
Alphabet's first-party AI model, Gemini, processed more than 16 billion tokens per minute via direct API use in Q1 2026, the company said, representing a 60% increase from the prior quarter.
#Reported EPS Inflated by Unrealized Investment Gains
Diluted earnings per share for the quarter were $5.11, up 82% from $2.81 in Q1 2025. Net income was $62.6 billion.
However, the company noted that net income included $36.9 billion in net unrealized gains on non-marketable equity securities. Excluding the tax-adjusted impact of those gains, diluted EPS would have been approximately $2.76 lower, at roughly $2.35 attributable to the investment portfolio movement. Investors and analysts typically adjust reported EPS to exclude unrealized mark-to-market swings of this scale.
Operating income, which excludes investment gains, rose 30% to $39.7 billion. Operating margin expanded 2 percentage points to 36.1%.
Capital expenditure for the quarter was $35.7 billion, up from $17.2 billion in Q1 2025, reflecting the company's AI infrastructure buildout. Free cash flow was $10.1 billion after those expenditures.
#Waymo and Dividend
Alphabet's autonomous vehicle unit, Waymo, reached 500,000 fully autonomous rides per week, the company stated. Alphabet-level activities, which include shared AI research and development costs, recorded an operating loss of $5.4 billion for the quarter.
On April 27, 2026, Alphabet's board declared a quarterly cash dividend of $0.22 per share, a 5% increase from the prior quarterly payment of $0.21. The dividend is payable June 15, 2026 to shareholders of record as of June 8, 2026.
Alphabet also issued $31.1 billion in senior unsecured notes during the quarter for general corporate purposes, increasing long-term debt to $77.5 billion.
Management projected continued investment in AI infrastructure for the remainder of 2026, though the company cautioned that actual results may differ materially from forward-looking statements due to risks including macroeconomic conditions, regulatory developments, competition, and the volatility of unrealized investment gains in future reporting periods.