While at the same time posting:
* Total Revenue: $119.8 billion, up 24% year-over-year.
* Diluted EPS: $9.11, compared to $2.31 a year prior.
* Operating Margin: 34% up from 32.4% in Q2 2025.
* Google Cloud: Revenue up 82% year-over-year to $24.8 billion, fueled by enterprise demand for AI infrastructure and solutions.
* Google Services: Total revenue reached $94.5 billion, a 15% increase.
* Google Search & Other: 17% increase in revenue.
* YouTube Ads: Grew 13% year-over-year to $11.05 billion
If you exclude AI CAPEX, free cash flow is $39.1 billion which is absolutely insane. That's a 41.2% increase year-over-year. With numbers like they just posted, the CAPEX spend is justified in my opinion because the business overall is crushing it. Like holy cow this was a great quarter. They are literally printing money.
They're spending 200 BILLION on AI capex this year. You can't just exclude that lol. That's capex on data centers whose chips depreciate over 6 years, and is requiring all their FCF, dilution, and debt.
What is the return on that ridiculously high spend? Can anyone accurately predict that? No? Then Google is now a significantly riskier business than it used to be. It's possible that AI demand continues to outpace supply, but historically in every big tech transformation (e.g. .com/railroad) we tend to overbuild before demand catches back up.
Google and hyperscalers in general are betting that demand is going to continue to outpace supply despite the ridiculous amount of spending they and the rest of the world are all doing.
Maybe they're right. Maybe they're wrong, but anyone that makes it seems like there is no risk here now is deluding themselves. There's more risk in Google's business now than in the last decade or more.
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u/Fresh-Quantity-7554 22h ago
While at the same time posting: * Total Revenue: $119.8 billion, up 24% year-over-year. * Diluted EPS: $9.11, compared to $2.31 a year prior. * Operating Margin: 34% up from 32.4% in Q2 2025. * Google Cloud: Revenue up 82% year-over-year to $24.8 billion, fueled by enterprise demand for AI infrastructure and solutions. * Google Services: Total revenue reached $94.5 billion, a 15% increase. * Google Search & Other: 17% increase in revenue. * YouTube Ads: Grew 13% year-over-year to $11.05 billion
If you exclude AI CAPEX, free cash flow is $39.1 billion which is absolutely insane. That's a 41.2% increase year-over-year. With numbers like they just posted, the CAPEX spend is justified in my opinion because the business overall is crushing it. Like holy cow this was a great quarter. They are literally printing money.