Alphabet shares slumped more than 7% after the search giant reported a drop in free cash flow during the third quarter.
Here's how the company did, compared with estimates from analysts polled by LSEG:
- Earnings per share: $2.12. It is not immediately clear if the reported earnings are comparable to the LSEG analyst estimate of $3.02
- Revenue: $127.58 billion vs. $128.22 billion
Revenue grew 25% from a year ago, which marked the fastest rate of growth for any period since 2021.
Net income fell to $26.17 billion, or $2.12 per share, down from $34.98 billion, or $2.87 per share.
Google's free cash flow fell again during the third-quarter to $9.07 billion. That fell far further than the $2.70 billion expected by analysts.
As questions mount over heightened spending on the artificial intelligence buildout, Google capital expenditures totaled $51.36 billion, compared to $55.09 billion expected by analysts.
During the second quarter, Alphabet lifted its full-year forecast for capital expenditures to between $195 billion and $205 billion, up from prior guidance of as much as $190 billion. Annual capex is expected to top $200 billion before exceeding $300 billion in 2027.
Operating income totaled $40.58 billion, missing a $43.19 billion forecast from FactSet.
Alphabet saw a $99.03 billion windfall in revenue from equity holdings in the second quarter, fueled by stakes in SpaceX and Anthropic. However, the category weighed on results in the third quarter, producing a $8.66 billion loss.
Google continues to open its wallet to fuel the AI expansion. That contributed to strong revenue growth in its cloud division, home to its suit of AI offerings.
Cloud revenue more than doubled to $30.7 billion, surpassing the $28.7 billion, or 90% growth expected by analysts. The company continues taking market share from larger rivals Amazon Web Services and Microsoft Azure.
The company's aggressive push on its AI models also showed signs of a payoff. Google said its Gemini app reached 1 billion users, making it the fastest-growing product in its history.
Alphabet's search revenue grew 12% to $63.35 billion, but fell short of a $64.96 billion estimate.
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WATCH: Wall Street expects cloud growth to top 90% as search slows