Google enters July 22 with capex outrunning cash growth

Alphabet enters July 22 with faster top-line growth

Alphabet enters the 2026-07-22 earnings report with first-quarter 2026 revenue growth above its FY2025 pace and FY2025 capex growth far above free-cash-flow growth. Alphabet reported first-quarter 2026 revenue of $109.9 billion, up 22% year over year. Google Cloud reported revenue of $20 billion, up 63% year over year. Those rates compare with Alphabet’s 15% revenue growth in FY2025.

Google also drew more attention than its normal operating range. Google drew 385 articles in the TEXXR coverage record in 2026Q2, 1.6× the trailing eight-quarter average of 234. That corpus-only baseline says the street faces an unusually noisy record going into July 22. Model launches are easy to count. Alphabet’s cash lines show the bill.

Alphabet’s capex has outrun free cash flow

Alphabet reported FY2025 revenue of $402.8 billion, up 15% from FY2024 revenue of $350.0 billion, which had grown 14%, according to its filed record. Alphabet reported FY2025 net income of $132.2 billion, up 32% from $100.1 billion in FY2024, when net income grew 36%. Profit growth remained well above revenue growth.

Alphabet generated operating cash flow of $164.7 billion in FY2025, up 31% from $125.3 billion in FY2024, as filed. Alphabet spent $91.4 billion on capex in FY2025, up 74% from $52.5 billion in FY2024, when capex grew 63%. Operating cash flow grew, but capex grew more than twice as fast.

Alphabet generated $73.3 billion of free cash flow in FY2025, up 1% from $72.8 billion in FY2024, when free cash flow grew 5%. Alphabet’s free-cash-flow margin fell to 18.2% from 20.8% over the same period. Alphabet’s capex-to-revenue ratio rose to 22.7% from 15.0%.

Alphabet therefore spent $18.1 billion more on capex than it produced in free cash flow during FY2025. Alphabet had produced $20.3 billion more free cash flow than capex in FY2024. Alphabet swung that relationship by $38.4 billion in one year. That spread is the cleanest entry point into the AI capex cycle.

Alphabet still owes the depreciation bridge

Alphabet’s supplied as-filed annual series omits a depreciation figure, compared with complete FY2025 capex, EBITDA, and free-cash-flow lines. Alphabet reported FY2025 EBITDA of $180.7 billion, up 33% from $135.4 billion in FY2024, when EBITDA grew 38%. EBITDA excludes depreciation and amortization, so it cannot show how much of the recent build has reached reported operating costs.

Alphabet can close that gap on July 22 by disclosing current depreciation against the prior-year period and by explaining any useful-life changes. Alphabet’s depreciation growth should show how much of the 2024–2025 build has entered the income statement. Alphabet’s capex growth should show how much more remains in the pipeline. Without both figures, the street can see the cash leaving but not the full earnings drag arriving.

Google is cutting model unit costs while training more models

Google entered the report date with a direct response to compute cost. Google said Gemini 3.6 Flash uses 17% fewer tokens than Gemini 3.5 Flash in some workloads and costs less per token than that prior model.

Google priced Gemini 3.6 Flash input at $1.50 per million tokens and output at $7.50 per million tokens. Google priced Flash-Lite input at $0.30 per million tokens and output at $2.50 per million tokens, below the corresponding 3.6 Flash prices. Google also started Gemini 4 pre-training while launching the new Flash lineup.

Google is trying to offset heavier model use with lower token consumption and lower prices. Google did not disclose model gross margin in those launch materials. Alphabet’s July 22 numbers can connect that product-level efficiency to Cloud margins, infrastructure utilization, and cash conversion.

Publishers can raise Google’s input cost

Google also enters July 22 with content access under pressure. Sources told The Wall Street Journal that Reddit, Politico, and other publishers were considering access restrictions as AI products reduce referral traffic. Reddit signed a $60 million annual deal with Google in 2024; the current talks compare with that paid-access baseline.

Google needs publisher material as an AI input while publishers need Google as a distribution channel. Publishers that restrict access can raise Google’s data-acquisition cost or reduce available material. Alphabet’s report may not price that tension, but the coverage record can track whether more publishers move from licensing talks to access limits.

Watch the cash lag, not the launch count

• Alphabet’s capex growth: compare the current rate with FY2025’s 74% increase and operating cash flow’s 31% increase.
• Alphabet’s depreciation growth: demand a current figure and a prior-year baseline; the supplied annual series provides neither.
• Alphabet’s free-cash-flow growth: compare the current period with FY2025’s 1% growth and 18.2% margin.
• Google Cloud’s revenue growth: compare the new rate with first-quarter 2026 growth of 63% year over year.
• Google’s model economics: track whether lower token use and lower prices appear in Cloud margins or only in product claims.
• Google’s content access: count publishers imposing restrictions against the 2024 Reddit paid-access baseline.

Sources

The record:

• Google launches Gemini 3.6 Flash, 3.5 Flash-Lite, and 3.5 Flash Cyber, and says it has started its “most ambitious pre-training run yet” for Gemini 4 — Google, 2026-07-22 — original · TEXXR record
• Google prices Gemini 3.6 Flash lower than 3.5 Flash, at $1.50/1M input tokens and $7.50/1M output tokens, and Gemini 3.5 Flash-Lite at $0.30/1M and $2.50/1M — 9to5Google, 2026-07-22 — original · TEXXR record
• Google says Gemini 3.6 Flash improves coding, multimodal, and knowledge work performance and uses up to 17% fewer tokens and costs less per token vs. 3.5 Flash — CNBC, 2026-07-22 — original · TEXXR record
• Sources: Reddit, Politico, and others mull cutting Google's access to their content for AI as traffic drops; Reddit signed a $60M/year deal with Google in 2024 — Wall Street Journal, 2026-07-22 — original · TEXXR record