Alphabet Inc. stock research
FY2026 Q1
Alphabet (GOOGL) Gross Margin — Quarter Ended Mar 31, 2026
Revenue was lower than the previous quarter but higher than a year ago, while gross profit was higher than both periods. Cost of revenue decreased from the prior quarter but increased year-over-year, resulting in gross margin improvement compared to both the immediate preceding quarter and the same quarter one year earlier.
Gross margin takeaway
Quarter ended Mar 31, 2026 · FY2026 Q1
Revenue was lower than the previous quarter but higher than a year ago, while gross profit was higher than both periods. Cost of revenue decreased from the prior quarter but increased year-over-year, resulting in gross margin improvement compared to both the immediate preceding quarter and the same quarter one year earlier.
- The strongest observable margin driver is the movement in cost of revenue: it declined more than revenue sequentially and grew at a slower pace than revenue year-over-year, directly expanding gross margin.
- Gross margin improved compared to the immediately preceding quarter and the same quarter one year earlier, reflecting a more favorable relationship between revenue and cost of revenue in the current period.
Gross margin snapshot
The selected quarter's reported revenue, gross profit, direct costs, and margin comparisons.
Gross margin
62.4%
Gross profit
$68.6B
Revenue
$109.9B
Cost of revenue
$41.3B
Quarter-over-quarter change
+2.7 pts
Year-over-year change
+2.7 pts
Quarterly gross margin trend
A four-quarter view of the revenue and direct-cost bridge behind gross margin.
| Period | Revenue | Gross profit | Cost of revenue | Gross margin |
|---|---|---|---|---|
| Jun 30, 2025 | $96.4B | $57.4B | $39.0B | 59.5% |
| Sep 30, 2025 | $102.3B | $61.0B | $41.4B | 59.6% |
| Dec 31, 2025 | $113.8B | $68.1B | $45.8B | 59.8% |
| Mar 31, 2026 | $109.9B | $68.6B | $41.3B | 62.4% |
Quarterly comparisons
Compare the selected margin with the preceding quarter and the same fiscal quarter one year earlier.
Previous-quarter change
Dec 31, 2025
+2.7 pts
Year-over-year change
Mar 31, 2025
+2.7 pts
What the margin says
Filing-constrained interpretation of margin direction, comparisons, and what to monitor next.
The strongest observable margin driver is the movement in cost of revenue: it declined more than revenue sequentially and grew at a slower pace than revenue year-over-year, directly expanding gross margin.
Gross margin improved compared to the immediately preceding quarter and the same quarter one year earlier, reflecting a more favorable relationship between revenue and cost of revenue in the current period.
Monitor the trend in cost of revenue relative to revenue, as its movement was the key factor behind the margin change.
Peer context
Latest available gross margins for related public companies.
| Company | Gross margin |
|---|---|
| Alphabet Inc. (GOOGL) | 62.4% |
| Meta Platforms, Inc. (META) | 81.9% |
| Microsoft Corporation (MSFT) | 67.6% |