Google Earnings Q2: Free Cash Flow in the Red; Purchase Commitments Balloon

Alphabet delivered a strong quarter with revenue rising 24% and Google Cloud accelerating 82% to $24.8 billion. However, quarterly capex ballooned to $44.9 billion, which exceeds operating cash flow of $39.1 billion, which pushed free cash flow into the red at ($5.9 billion). Where things intensified is that Google reported negative FCF yet analyst were not modeling for this to happen until around 2028. You can see below that Google was expected to report FCF of $22.7 billion this year, yet raised capex from $185B at the midpoint to $200B at the midpoint, which quickly eroded the FCF margin.

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