Alphabet reported third-quarter revenue of $127.6 billion, below analysts’ $128.2 billion estimate, and negative free cash flow of $9.07 billion. Its shares fell about 8% in extended trading.
Alphabet missed Wall Street revenue expectations for the third quarter as heavy AI spending accelerated its cash burn. Free cash flow was negative $9.07 billion, compared with a $5.9 billion burn in the prior quarter and analyst expectations of near break-even.
Total revenue was $127.6 billion, below the $128.2 billion estimate. Google’s core advertising business generated $82.01 billion, about $1.41 billion short of expectations, while Google Cloud revenue more than doubled to $30.71 billion and exceeded estimates.
Alphabet reported a $7.66 billion operating income loss in “Alphabet-level activities,” primarily reflecting AI research and development expenses. The company has invested in cloud capacity and AI research, while Google Cloud has expanded enterprise commitments across cybersecurity, retail and financial services.
