Core Insights - Alphabet's Q2 2026 financial results show total revenue of $96.428 billion, a 14% year-over-year increase, and a net profit of $28.196 billion, up 19% year-over-year [2][5][6] Revenue Breakdown - Google Cloud revenue reached $13.6 billion, marking a 32% increase, driven by AI products and Google Workspace [3][6] - Google Services revenue grew by 12% to $82.5 billion, with Google Search and other revenues also increasing by 12% to $54.2 billion [10][11] - YouTube ad revenue rose by 13% to $9.8 billion, while network ad revenue slightly declined by 1% to $7.4 billion [12] Cost and Expenses - Total costs and expenses for the quarter were $65.157 billion, reflecting a 14% increase year-over-year [5][6] - Research and development costs increased by 16% to $13.808 billion, while general and administrative expenses surged by 65% to $5.209 billion [6] Capital Expenditure - Alphabet announced a significant increase in capital expenditure for 2025, raising it by $10 billion to approximately $85 billion, primarily for computing infrastructure [3][15] AI and Talent Strategy - CEO Sundar Pichai highlighted the positive impact of AI across all business segments, with the Gemini App reaching over 450 million active users [2][16] - The company is focused on talent retention and acquisition, reporting healthy data in these areas despite some high-profile cases in the industry [17] Future Outlook - Alphabet anticipates that the upcoming U.S. election advertising spending and the backlog of Google Cloud orders will positively influence Q3 revenue [15] - However, there are concerns about potential supply-demand imbalances in the cloud business in 2026 [15] Financial Health - The company's free cash flow has reached a historical low of $5.3 billion, significantly down from $18.95 billion in the previous quarter [18]