Alphabet reported consolidated revenue of $102.3 billion, up 16% year over year (15% in constant currency). Net income rose to $35 billion, a 33% increase, with earnings per share of $2.87. Operating income reached $31.2 billion and operating margin was 30.5% (33.9% excluding the European Commission fine). Google Services revenue increased 14% to $87.1 billion, with Search and YouTube advertising each up 15%. Cloud revenue grew 34% to $15.2 billion, with operating income up 85% and a 23.7% segment margin. Free cash flow was $24.5 billion for the quarter and $73.6 billion trailing twelve months. Management cautioned that strong 2024 U.S. election ad spend will make year-over-year advertising comparisons difficult, and that elevated investments in technical infrastructure will raise depreciation and data center energy costs, keeping supply tight into Q4 and 2026.
"Consolidated Revenue -- $102.3 billion, up 16% year over year or 15% in constant currency. Net Income -- $35 billion, a 33% increase, with earnings per share up 35% to $2.87. Operating Income -- $31.2 billion, up 9%; operating margin reached 30.5%, or 33.9% excluding the European Commission fine. Free Cash Flow -- $24.5 billion free cash flow; $73.6 billion for the trailing twelve months, benefiting from recent tax changes on R&D expensing and increased operating cash flow."
"Google Services Revenue -- $87.1 billion, increasing 14%, with Search and advertising revenues up 15% to $56.6 billion and YouTube advertising revenues up 15% to $10.3 billion. Cloud Revenue -- $15.2 billion, growing 34%; operating income up 85% to $3.6 billion with a 23.7% segment margin, compared to 17.1% a year ago. Cloud Backlog -- Increased sequentially by 46% to $155 billion, with a $49 billion rise quarter ove"
""year-over-year comparisons in advertising will be negatively impacted by the strong spend on U.S. Elections in 2024, particularly on YouTube." "we still expect to remain in a tight demand-supply environment in Q4 and 2026," referencing data center and server capacity deployments. "the significant increase in our investments in technical infrastructure will continue to put pressure on the P&L in the form of higher depreciation expenses and related data center operations costs such as energy.""
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