[Google Earnings Call: Gemini Monthly Active Users Reach 1 Billion, But Capital Expenditure Expected to Increase Significantly Next Year] BlockBeats reports that on October 29th, Google's parent company, Alphabet, held a conference call early this morning after releasing its Q3 2026 earnings report. The company's revenue for the quarter reached $127.6 billion, a year-over-year increase of 25%, with an annualized revenue run rate reaching $500 billion. Google Cloud revenue increased by 103% year-over-year to $30.7 billion. However, both revenue and profit slightly missed Wall Street expectations, and the stock price fell by approximately 9% to 10% in after-hours trading following the earnings release. During the conference call, CEO Sundar Pichai stated that the company's full-stack AI strategy is driving momentum across all business lines. He pointed out that AI investment has increased search usage and query growth, with year-over-year query growth reaching a near five-year high, including strong growth in business queries. The company is building a seamless experience encompassing AI Overviews, AI Mode, and traditional search, with user queries exhibiting longer, more personalized, and more modal characteristics. Pichai also introduced AI product progress: the Gemini app has reached 1 billion monthly active users, becoming the fastest-growing product in Google's history; the first-party model API processes nearly 32 billion tokens per minute, a 40% increase month-over-month and more than four times the speed of a year ago. The company officially announced the launch of its next-generation cutting-edge model, Gemini 4 Carbon, which leads in multiple benchmarks, particularly showing significant improvements in cybersecurity and long-duration task capabilities. Gemini 4 Argon, launched two weeks prior, has also demonstrated rapid adoption. In addition, the company announced progress on the world model, Genie 4, among others. In terms of business segments, management mentioned that Google Services revenue grew 11% to $96.3 billion, with search and other advertising revenue increasing by 12% year-over-year, and YouTube advertising revenue growing by approximately 9% to $11.2 billion. YouTube Music and Premium subscribers (including trials) have exceeded 150 million. The rapid growth in the cloud business was primarily driven by strong enterprise demand for AI infrastructure, AI solutions, and TPU systems. Despite management's positive tone, profitability and cash flow performance remained a focus. Net income attributable to common shareholders for the quarter was $26.2 billion, a year-over-year decrease, mainly due to losses on equity securities investments (approximately $8.7 billion in losses during the quarter). Operating profit increased by 30% year-over-year to $40.6 billion, with the operating margin improving to 31.8%, but free cash flow turned negative. Capital expenditures remained high. CFO Anat Ashkenazi stated that the company expects capital expenditures to increase significantly in 2027. Meanwhile, the company maintained its full-year 2026 capital expenditure guidance, remaining within the range of $195 billion to $205 billion. In his speech, Pichai stated that the company is confident in long-term demand, is accelerating capacity expansion, and expects model iteration and product rollout to accelerate further in the next 12 months. Other businesses, such as Waymo, are also progressing steadily, with autonomous driving mileage exceeding 300 million miles. Market reaction, however, was more cautious. Investors acknowledged the rapid growth of the cloud business and the boost AI would provide to search, but expressed concerns about slightly lower-than-expected revenue and profits, high capital expenditures, and pressure on free cash flow. Management's optimistic statements about the prospects of AI during the conference call did not completely dispel market doubts about the short-term return on investment.