Alphabet shares drop over 10% as Q3 free cash flow falls sharply
Alphabet’s Class C shares fell more than 10% after the company reported a $9.07 billion negative free cash flow for Q3, missing forecasts despite a 25% revenue rise.
Key points
- Class C shares slid more than 10% after Q3 results.
- Revenue grew 25% year‑over‑year, but free cash flow turned negative.
- Net income fell to $26.17 billion, down from $34.98 billion a year earlier.
- Capital expenditures hit $51.36 billion, below the $55.09 billion forecast.
- Long‑term debt rose to $125.1 billion from $21.6 billion a year earlier.
Alphabet Inc. Class C shares fell more than 10% after the company reported a significant decline in free cash flow for the third quarter.
Revenue increased 25% year‑over‑year, yet the quarter marked Alphabet’s first top‑and‑bottom‑line miss in nearly four years.
Net income decreased to $26.17 billion, or $2.12 per share, from $34.98 billion, or $2.87 per share, a year earlier.
The firm posted negative free cash flow of $9.07 billion, well below analysts’ expectation of $2.70 billion.
Capital expenditures totaled $51.36 billion, missing the $55.09 billion forecast.
Alphabet maintained its full‑year capital‑expenditure outlook of $195 billion to $205 billion, a raise from $190 billion set in the second quarter, and expects annual capex to exceed $200 billion before surpassing $300 billion in 2027.
"We continue to expect our capex to increase significantly in 2027, and will provide further details on our Q4 call," finance chief Anat Ashkenazi said during the earnings call.
Long‑term debt rose sharply to $125.1 billion from $21.6 billion a year earlier.
Your questions, answered
Why did Alphabet’s shares fall more than 10%?
The drop followed a report of $9.07 billion negative free cash flow for the quarter, far below analysts’ expectations.
Did Alphabet’s revenue increase in the quarter?
Yes, revenue rose 25% compared with the same quarter a year earlier.
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