Google’s Record $112 Billion Profit Quarter Was Mostly Unrealised Gains

$GOOGL reported $112.1 billion in quarterly net income and EPS of $9.11 , crushing Wall Street’s $2.87 estimate.
But approximately $99 billion came from “other income,” primarily unrealised gains on Alphabet’s equity investments.
After tax, those paper gains added $77.1 billion to net income and contributed $6.26 of reported EPS. Excluding them, adjusted EPS was roughly $2.85 , slightly below the $2.89 estimate.
Much of the revaluation reportedly came from Alphabet’s holdings in SpaceX and Anthropic. Google did not sell those investments—the company simply marked them to higher estimated values.
Meanwhile, the cash picture looked very different:
Free cash flow: -$5.9 billion
Capital expenditure: $44.9 billion
Operating cash flow: $39.1 billion
Future spending commitments: $811 billion
2026 capex guidance: $195–$205 billion
Google Cloud still delivered an exceptional quarter, with revenue rising 82% to $24.8 billion . However, Anthropic is simultaneously one of Alphabet’s largest investments and a major Google Cloud customer.
That creates an unusual cycle: Google invests in Anthropic, Anthropic commits to buying Google compute, its valuation rises, and Alphabet records the increase as profit.
The headline showed one of the largest corporate profit quarters ever. The cash-flow statement told a very different story.