INTEL: Alphabet shares fall 7.53% after revenue miss and record $9.07B quarterly cash burn
Update (28 Oct 2026): Alphabet shares have fallen 7.53% after the results. New details show a record quarterly cash burn, a Gemini user milestone and comments from Pichai.
Alphabet (GOOGL) shares fell 7.53% after the company reported third-quarter revenue of $127.6 billion, short of the $128.22 billion analysts expected, and negative free cash flow of $9.07 billion, a record cash burn. Analysts had expected free cash flow of about negative $36 million. The revenue miss was first reported by Bloomberg.
Record cash burn
Third-quarter free cash flow was roughly $9.03 billion weaker than the analyst forecast. Trailing twelve-month free cash flow was $19.75 billion, down 73% year on year. Capital expenditure for the quarter was $51.36 billion, against expectations of $55.78 billion, about $4.42 billion less than forecast.
Operating income, Search and Cloud
Operating income was $40.58 billion against an estimate of $43.16 billion, a shortfall of about $2.58 billion that is larger than the roughly $620 million revenue gap. Earnings per share were $2.12 and net income was $26.2 billion.
Cloud revenue was $30.71 billion, ahead of the $29.1 billion estimate by about $1.61 billion. Search revenue was $63.35 billion and missed expectations. The figures supplied do not include the Search estimate, so the size of that miss is not stated here.
Gemini and management comments
According to the earnings release, the Gemini app has reached one billion users. Pichai said Alphabet is now at a half-trillion-dollar annual revenue run rate, describing Google as being at a $500 billion annual run rate. He also said the Argon model sped up code development. The supplied material gives no further detail on the model.
Key figures
- Revenue: $127.6 billion vs. $128.22 billion estimate (miss)
- Operating income: $40.58 billion vs. $43.16 billion estimate (miss)
- Cloud revenue: $30.71 billion vs. $29.1 billion estimate (beat)
- Search revenue: $63.35 billion (missed estimates)
- Free cash flow: negative $9.07 billion vs. about negative $36 million expected
- Capital expenditure: $51.36 billion vs. $55.78 billion estimate
- Earnings per share: $2.12
- Net income: $26.2 billion
The supplied figures do not include a per-share estimate.
