Alphabet reported Q2 2026 earnings, with Google Search & Other revenue up 17% year over year to $63.27 billion. The growth rate eased from 19% in Q1 2026, marking the first decline after four quarters of acceleration.
Total Alphabet revenue reached $119.8 billion, up 24% year over year, or 23% in constant currency. It was the company’s 12th consecutive quarter of double-digit revenue growth.
Operating income rose 30%, and the operating margin reached 34%. Google also said its Gemini app now has 950 million monthly active users, up from more than 750 million in Q4 2025, and that its models process 22 billion API tokens per minute.
A Year Of Acceleration, Then A Step Down #
Google Search and Other’s year-over-year growth increased from 10% in Q1 2025 to 12% in Q2, then to 15% in Q3, reaching 17% in Q4 2025, and finally 19% in Q1 2026.
The 17% growth in Q2 2026 marks the first decrease within that period. Although the growth rate has declined, it remains positive, and revenue grew from $54.19 billion a year earlier.
What Drove The Growth #
In the earnings release, CEO Sundar Pichai reiterated the link between Search and AI, saying the company’s “popular AI features are driving Search query growth.”
During the earnings call, Chief Business Officer Philipp Schindler provided more detail on the 17% increase, attributing it to strong performance across various verticals and extensive Gemini integration within Google’s advertising systems.
Retail led the gains, followed by finance, technology, media, and entertainment. This differs from the Q1 2026 report, which highlighted retail and finance as the main drivers, with health also contributing. Google did not disclose the contribution of individual verticals for this quarter or the previous one.
AI Max And Ad Monetization #
Schindler highlighted AI Max, Google’s AI-driven targeting and creative tool for Search campaigns, which he said is enabling advertisers to target searches that were previously hard to monetize. Google did not specify how much AI Max contributed to the quarter’s revenue.
This comment connected Google’s AI efforts directly to its ad revenue, extending the narrative from Q4 2025, when the company detailed its first AI Mode ad tests.
Why This Matters #
Over the course of a year, Google’s Search revenue grew faster each quarter, with the company regularly attributing growth to AI features and performance.
Although the growth slowed in Q2, Google continued to emphasize AI’s role. These figures reflect Google’s Search & Other revenue, not organic visibility or individual website traffic. A strong revenue quarter for Google doesn’t necessarily indicate increased traffic to your site; use your own Search Console and analytics tools for that.
The new Google generative AI report in Search Console displays impressions in AI Overviews and AI Mode. However, it only shows impressions, not clicks or click-through rates, focusing on AI feature visibility rather than traffic impact.
Looking Ahead #
The key question coming out of the quarter is whether Q2 was a temporary slowdown in growth or the start of a slower run. If Q1 turns out to be the high point in this run, then forecasts based on continued acceleration might need to be reevaluated.
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