Alphabet reports strong cloud growth but negative cash flow in Q3

Alphabet reported Q3 results on Oct 28, with revenue of $127.6B and EPS of $2.12. Google Cloud revenue more than doubled to $30.71B, while Alphabet posted negative free cash flow of $9.07B. Shares fell 8% in extended trading as investors weighed cloud growth against heavy AI investment.

The results give investors a mixed signal: rapid cloud expansion alongside substantial cash consumption from AI infrastructure spending. The negative free cash flow and share-price decline show that the market reaction was unfavorable despite the cloud growth.

  • 1Alphabet reported Q3 net income of $26.5B, affected by an $8.7B loss on equity securities.
  • 2YouTube ad revenue increased 9.2% to $11.21 billion in Q3.
  • 3The Gemini app reached 1 billion users, and YouTube Music and Premium subscriptions reached 150 million.
  • 4Google Cloud revenue grew 103% in Q3.
  • Materials differ on the revenue comparison: some report a miss against $128.2B estimates, while another says sales met estimates.
  • Materials quote different EPS benchmarks, including $2.94, $3.01 and $3.02.

Sources