Google Cloud Revenue Jumps 82% as Backlog Hits $514 Billion

Google Cloud saw its revenue climb to $24.8 billion in Q2 2026, an 82% increase compared to the same period last year. This growth helped push the division's contracted backlog, or remaining performance obligations, to $514 billion.

The cloud unit is now a primary driver for Alphabet, accounting for nearly half of the parent company's total revenue growth and roughly two-thirds of its incremental operating profit. Alphabet reported total Q2 revenue of $119.8 billion, representing a 24% year-over-year increase.

Google Cloud's operating income tripled to $8.8 billion, resulting in an operating margin of approximately 35.6%. CEO Sundar Pichai noted that the backlog grew by more than $50 billion sequentially, largely due to multi-year commitments for AI workloads.

The company expects more than 50% of this $514 billion backlog to be recognized as revenue within the next 24 months. Pichai stated that nearly 90% of Fortune 100 companies are now using Gemini Enterprise.

Google Cloud's 82% growth rate significantly outpaced competitors, with AWS reporting 37% growth and Microsoft Azure posting 43% growth for the same quarter. The shift toward multi-year deals suggests that customers are moving beyond pilot programs into production deployments for AI.

Alphabet has adjusted its full-year 2026 capital expenditure guidance to a range between $195 billion and $205 billion.