Q1 2026 Alphabet Inc Earnings Call Transcript
Key Points
- Alphabet Inc (GOOG) reported a 22% increase in consolidated revenue, reaching $109.9 billion, marking the 11th consecutive quarter of double-digit revenue growth.
- Google Cloud revenue grew by 63%, driven by strong demand for AI solutions and infrastructure, with the backlog nearly doubling to $462 billion.
- The company saw a significant increase in paid subscriptions, reaching 350 million, with YouTube and Google One as key drivers.
- AI investments are driving performance across the business, with AI models processing over 16 billion tokens per minute, up from 10 billion last quarter.
- YouTube continues to show momentum, with US viewers watching over 200 million hours of content daily and a significant increase in YouTube Music and Premium subscribers.
- Network advertising revenues declined by 4% year-on-year, indicating challenges in certain advertising segments.
- Total operating expenses increased by 24% to $28.9 billion, driven by higher compensation and marketing investments.
- The Other Bets segment reported an operating loss of $2.1 billion, highlighting ongoing challenges in non-core business areas.
- The company is facing compute constraints, which have limited its ability to meet demand, particularly in Google Cloud.
- There is a low single-digit percentage point headwind to Google Cloud's operating margin for the remainder of 2026 due to the acquisition of Wiz.
Welcome, everyone. Thank you for standing by for the Alphabet first-quarter 2026 earnings conference call. (Operator Instructions)
I would now like to hand the conference over to your speaker today, Jim Friedland, Head of Investor Relations. Please go ahead.
Thank you. Good afternoon, everyone, and welcome to Alphabet's first-quarter 2026 earnings conference call. With us today are Sundar Pichai, Philipp Schindler, and Anat Ashkenazi. Now I'll quickly cover the Safe Harbor.
Some of the statements that we make today regarding our business, operations, and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to our Forms 10-K and 10-Q, including the risk factors. We undertake no obligation to update any forward-looking statement.
During this call, we will present both GAAP and non-GAAP financial
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