Alphabet Inc. Q1 FY2026 earnings call

Sundar highlighted strong momentum in Alphabet's business with AI investments driving performance. Search revenue grew 19% with AI experiences like AI mode and overviews. Cloud revenue grew 63% to over $20 billion with backlog nearly doubling. Gemini Enterprise had 40% QoQ growth in paid monthly active uses. Subscriptions saw 350 million paid subscriptions. AI infrastructure discussed with custom TPUs and GPUs. YouTube had over 200 million daily U.S. living room views and over 10 million daily shorts publishing channels. Google Ads accelerating Gemini deployment across ads infrastructure for quality, advertiser tools, and new user experiences.

Google services revenues were $89.6 billion, up 16%. Google Search and other advertising revenues increased by 19% to $60.4 billion. YouTube advertising revenues increased 11% to $9.9 billion. Network advertising revenues of $7 billion were down 4%. Subscription platforms and devices revenues increased 19% to $12.4 billion. Google Cloud revenues accelerated across all key areas and were up 63% to $20 billion. Google Cloud operating income was $6.6 billion, tripling year over year. Other bets revenues were $411 million, and operating loss was $2.1 billion.

Updated full-year 2026 CapEx Guidance Range to $180 to $190 billion. Expect 2027 capex to significantly increase. Q2 expected FX tailwind of approx one percentage point vs three in Q1. Cloud operating margin to have low single-digit percentage point headwind from Wiz acquisition remainder of 2026.

Cybersecurity threats from AI model use, supply chain challenges impacting compute capacity allocation, margin headwinds from acquisitions and increased CapEx.

Q: Brian Nowak asks about applying next-gen compute to search and TPU sales strategy.

A: Sundar talks about agentic flows in search and opportunistic TPU sales for customers.

Q: Doug with J.P. Morgan asks about CapEx and search query coverage.

A: Anat discusses CapEx to meet demand and Philip talks about AI improving query coverage.

Q: Eric Sheridan asks about cloud infrastructure and UCP.

A: Sundar and Philip discuss cloud differentiation and UCP's role in agentic commerce.

Q: Ross Sandler asks about AdWords evolution.

A: Philip focuses on user experience.

Q: Michael Nathanson asks about capacity allocation and Gemini app ads.

A: Sundar talks about R&D and model foundation, Philip on Gemini app user focus.

Q: Ron Josie asks about cloud margin expansion.

A: Philip talks about top-line growth and efficiency.

Q: Ken Gorofsky asks about supply chain and search monetization.

A: Ken discusses supply chain and subscription momentum.

Q: Justin Post asks about TPU sales and big AI deal margins.

A: Anat discusses backlog and margin considerations