Alphabet Inc. Q1 FY2026 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Highlights

  • Alphabet delivered an exceptionally strong Q1 2026, driven by broad-based momentum across Search, Cloud, YouTube, and AI subscriptions.
  • Consolidated revenue reached $109.9 billion, up 22% year-over-year (19% in constant currency). This marks the 11th consecutive quarter of double‑digit revenue growth.
  • Net income surged 81% year-over-year to $62.6 billion, aided by operating leverage and meaningful unrealized gains from equity securities.
  • Operating income was $39.7 billion, up 30% year-over-year, with a 36.1% operating margin.
  • The Board approved a 5% increase to the quarterly dividend.

Business Segment Highlights

Google Services

  • Revenue was $89.6 billion, up 16% year-over-year.
  • Search & Other revenue grew 19% to $60.4 billion, driven by strong retail and financial sector demand and increasing use of AI-enhanced search tools.
  • YouTube advertising revenue grew 11% to $9.9 billion, led by direct response advertising.
  • Network advertising declined 4% year-over-year to $7 billion.
  • Subscriptions, platforms, and devices revenue increased 19% to $12.4 billion, driven by growth in YouTube Music and Premium and Google One’s AI plan adoption.
  • Operating income rose 24% to $40.6 billion, with a 45.3% margin (expanding year-over-year).

Google Cloud

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Operator: 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. James Friedland: 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 measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is distributed and available to the public through our Investor Relations website located at abc.xyz/investor. Our comments will be on year-over-year comparisons unless we state otherwise. And now I'll turn the call over to Sundar. Sundar Pichai: Thanks, Jim. Hi, everyone, and thanks for joining us today. it was a terrific quarter for Alphabet. Our momentum was on full display a

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