The Google Group Alphabet generated almost $110 billion in sales in the first quarter of 2026, an increase of 22 percent year-on-year. Operating cash flow increased by 27 percent to just under $48 billion. There remained around $40 billion in operating profit, an increase of 30 percent. The operating margin climbed two percentage points to 36 percent. “2026 is off to a great start,” says CEO Sundar Pichai. “Our AI investments and full-stack approach illuminate every area of our business.”
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The search engine is currently developing particularly strongly. “AI is increasing usage,” exults Pichai. There were more queries than ever before – the manager does not reveal whether this is because users want to know more or because the AI bot needs multiple prompts to deliver satisfactory results. This detail is not that important for advertising sales in the first three months of the year.
The group division reported as “Google Search & others” was able to increase its advertising sales by 19 percent to 60.4 billion US dollars. On YouTube it is eleven percent more (9.9 billion dollars), only advertising placed by Google on third-party websites and apps saw a decrease of four percent to seven billion dollars. Overall, advertising placement remains Alphabet’s core business with quarterly sales of $77.3 billion (+16%).
Cloud earns, Waymo drives
There is also income from subscriptions such as Google One, for AI or YouTube, other paid services and the sale of devices. These Google businesses brought in a total of $12.4 billion in revenue (+19%).
Google Cloud’s sales grew more than three times as much, increasing by 63 percent to $20 billion. Other bets contributed a comparatively modest $411 million, a decline of nine percent – even though Waymo is offering more and more chauffeurless taxi rides. According to Pichai, there are now more than half a million transports per week.
What’s left of the sales
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Google Cloud can record almost a third of its sales as operating profit. In absolute terms, it is $6.6 billion, three times more than in the same quarter last year. For Google’s other services, the margin is significantly higher at 45 percent, especially since providing advertising requires less infrastructure. 40.6 billion US dollars is an increase of 24 percent – significantly more than the increase in sales. So operations have become more efficient.
The traditionally loss-making other bets have remained so. The exit of $2.1 billion actually increased by 71 percent. The many Waymo trips are obviously loss-making. Google received $31 billion by issuing an unsecured bond.
Huge pre-tax profit from investments
Google’s pre-tax profit jumped by 85 percent in the quarter. The $77.4 billion is made up of the aforementioned nearly $40 billion in operating profit and not quite $38 billion in other profits. These mainly involve unrealized increases in the book values of non-tradable shares in which Google has invested.
The tax burden has doubled to just under $15 billion, meaning Alphabet can report $62.6 billion in net profit (+81%). The dividend will be increased, albeit by a meager five percent. In after-hours trading after the quarterly figures were announced on Wednesday evening, Google shares initially gained more than six percent.
What Google spends money on
Operating costs have climbed from almost 60 billion to a good 70 billion US dollars (+18%). Of this, $17 billion goes to research and development (+26%).
Net spending on investments exploded, from a good 16 billion to more than 63 billion US dollars, almost four times as much. This includes the one hundred times higher item for takeovers of other companies and the acquisition of intellectual property rights (US$34 billion). Equal amounts flowed into tradable securities (US$31 billion, +68%) and the real estate and assets important for AI data centers (US$36 billion, +107%). Sales or expiry of tradable securities raised $38 billion (+87%), which has already been deducted from net investment spending.
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