investing in its partners as they seek to expand globally.<\/a><\/p>\nPichai said the company\u2019s \u201cglobal product footprint\u2026brings AI to more people than any other company.\u201d In the case of Google\u2019s search services, \u201cAI continues to drive an expansionary moment with new experiences resonating with users and driving growth in queries.\u201d He noted that monthly users of Google Search AI Mode now exceed 1 billion since it was made globally available last October.<\/p>\n
This week Google introduced three new models: Gemini 3.6 Flash, 3.5 Flash-Lite, and 3.5 Flash Cyber, for building AI agents at scale. Google said the new models meet the demands of developers and customers building production AI agents that need higher token efficiency, lower latency, and more reliable performance, according to the company.<\/p>\n
Google is also testing Gemini 3.5 Pro with partners and \u201cplan to make it broadly available as soon as it\u2019s ready,\u201d the company said in the announcement, and is already at work on Gemini 4.<\/p>\n
Google\u2019s model momentum and its position in the highly competitive AI model space was the focus for much of the Q2 earnings call.<\/p>\n
\u201cI think, you know, the frontier is incredibly dynamic space and it\u2019s fiercely moving forward. At any given moment, when you take a snapshot, it feels dynamic,\u201d CEO Pichai said. \u201cWe have, clearly, frontier models. There are many areas on which we are still at the frontier. There are areas where we acknowledge we need to improve\u2014coding and agent decoding is an example of that\u2014and I think the teams are very very focused on it with 3.6 flash. Flash is our workhorse model and we see tremendous demand for it, given it generally hits a sweet spot of performance, cost, reliability, latency, et cetera.\u201d<\/p>\n
\u201cGemini 3.5 Pro is currently in testing, and our team is already building the next generation of models,\u201d CEO Pichai said. \u201cWe have started our most ambitious pre-training run yet for Gemini 4 and are excited by the progress we are seeing at the frontier.<\/p>\n
\u201cDemand for our models is translating to strong token usage across developers and enterprise customers,\u201d he said, noting that the Gemini application now has 950 million monthly active users.<\/p>\n
And he said Gemini is a major driver of the growth of the company\u2019s cloud business. Google Cloud revenue in Q2 increased 82 percent year-over-year to $24.8 billion, led by an increase in Google Cloud Platform usage across enterprise AI solutions and enterprise AI infrastructure, as well as core GCP services.<\/p>\n
Google Services revenue grew 15 percent to $94.5 billion, led by 17 percent growth in Google Search, 15 percent growth in Google subscriptions, platforms and devices, and 13 percent growth in YouTube ads. (YouTube also got a boost from viewership gains through the company\u2019s partnership with FIFA and the just-concluded World Cup games.)<\/p>\n
\u201cGemini continues to be a key driver of growth and is deeply integrated across all of our cloud products, including Gemini Enterprise, data analytics, cybersecurity, and Google Workspace,\u201d Pichai said. \u201cWe are seeing strong, diversified demand across products, customers, geographies, and industries.<\/p>\n
\u201cGemini is transforming how millions of businesses use AI to build custom agents, automate processes, improve cybersecurity, manage customer relationships, data analytics, collaborate effectively, and more,\u201d the CEO said.<\/p>\n
A Closer Look At The Numbers<\/p>\n
Alphabet\u2019s consolidated revenue for the quarter increased 24 percent (23 percent in constant currency) to $119.8 billion from $96.4 billion in the same quarter one year earlier.<\/p>\n
The company said the revenue growth reflected \u201cstrong performance\u201d across the business and was the company\u2019s 12th consecutive quarter of double-digit revenue growth.<\/p>\n
Operating income for the quarter was $40.8 billion, up more than 30 percent from $31.3 billion one year ago.<\/p>\n
Reported net income of $112.1 billion for the quarter, up from $28.2 billion in the second quarter of 2025, included a net gain of $98.0 billion\u2014primarily the result of net unrealized gains on the company\u2019s equity securities.<\/p>\n
CFO Anat Ashkenazi said Google continues to build out its data center capacity to meet the rapid growth in demand for its services. While the company takes a \u201clong-term, multi-year view\u201d with those efforts, for the immediate future Alphabet will continue to enlist help from third-party service providers for capacity\u2014and that will put some pressure on profit margins.<\/p>\n
And the company\u2019s R&D expenses were up 32 percent in the quarter, driven, in part, due to \u201ccompensation from investments in AI talent,\u201d Ashkenazi said.<\/p>\n
\u201cAs we previously shared, we continue to expect our capex to increase significantly in 2027 and will provide more details at a later date,\u201d the CFO said. \u201cIn terms of expenses, the significant increase in our investments in technical infrastructure will continue to put pressure on the P&L in the form of higher depreciation expense and related data center operation costs such as energy. We also expect to continue in key investment areas such as AI and cloud, and we are investing in marketing to support our AI products.<\/p>\n
\u201cWe expect the free cash flow will remain under pressure, driven by our investments in technical infrastructure, which enables us to capitalize on the AI opportunity and continue to drive attractive returns,\u201d Ashkenazi said.<\/p>\n","protected":false},"excerpt":{"rendered":"The company reported a 24-percent surge in revenue for its second quarter, one day after unveiling a significant…\n","protected":false},"author":2,"featured_media":115660,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9],"tags":[24,408,407,25,410,402,403,313,2408,132,1430,415],"class_list":["post-115659","post","type-post","status-publish","format-standard","has-post-thumbnail","category-google","tag-ai","tag-ai-applications","tag-ai-infrastructure","tag-artificial-intelligence","tag-business-intelligence-and-analytics","tag-cloud-platforms","tag-cloud-software","tag-cybersecurity","tag-gemini","tag-google","tag-google-gemini","tag-llm"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/115659","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/comments?post=115659"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/posts\/115659\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media\/115660"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/media?parent=115659"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/categories?post=115659"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ai\/wp-json\/wp\/v2\/tags?post=115659"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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