Alphabet said on 28 October 2026 that its Other Bets segment had an operating loss of $2.0 billion in the third quarter, against $1.4 billion in the same quarter of 2025. Its segment table puts Other Bets revenue at $372 million, against $344 million.
By our arithmetic, that is a loss of $5.50 for every $1 of Other Bets revenue in the quarter, against $4.15 a year earlier. The release says Other Bets revenue comes primarily from autonomous transportation services and internet services.
Short explainer · Alphabet Other Bets brief
A vertical news Short narrated from the published headlines and opening lines of this piece and two related FourWeekMBA pieces on Alphabet and Waymo.
Business Pill · Operating Leverage
An evergreen Business Engineer explainer on operating leverage, how costs and revenue move together. It explains the general idea only and does not discuss Alphabet’s Other Bets.
The key insight: By our arithmetic from Alphabet’s segment tables, Other Bets lost $5.50 for every $1 of revenue in the third quarter, against $4.15 a year earlier, while nine-month revenue was flat at about $1.17 billion.
Update, 28 Oct: on the earnings call. Chief financial officer Anat Ashkenazi said Other Bets had revenues of $372 million and an operating loss of $2 billion “as we continue to expand Waymo’s business and invest in other key bets.” Sundar Pichai said Waymo has driven “more than 300 million fully autonomous miles” and operates in 15 major U.S. cities. (Quotes from a caption transcript of the call webcast.)
Alphabet’s quarterly results releases give the segment’s revenue and operating loss for each quarter. From October to December 2024 through July to September 2026, revenue moved between $344 million and $450 million, while the operating loss rose from $1.2 billion to $2.0 billion.
By our arithmetic from those releases, the loss per $1 of revenue was $2.94 in October to December 2024, $2.72 in January to March 2025, $3.34 in April to June 2025 and $4.15 in July to September 2025.
It was $9.78 in October to December 2025, when the segment’s loss was $3.6 billion, then $5.11 in January to March 2026, $4.71 in April to June 2026 and $5.50 in July to September 2026.
Alphabet Other Bets revenue and operating loss per quarter, October to December 2024 to July to September 2026, $ billions, with the loss per $1 of revenue below each quarter (our arithmetic). Sources: Alphabet quarterly results releases (SEC 8-K Ex. 99.1).
Nine Months: Losses Up, Revenue Flat
By our sum of the quarterly figures, Other Bets lost $5.9 billion in the first nine months of 2026, against $3.9 billion in the first nine months of 2025, an increase of 52.5%.
Revenue over the same nine months was $1,165 million, against $1,167 million a year earlier, by our sum.
What Alphabet Says Drives the Loss
The third-quarter release does not explain the change in the Other Bets loss. Alphabet had not filed its third-quarter Form 10-Q with the SEC when this piece was published.
Its earlier 10-Qs do. For January to March 2026, Alphabet says the Other Bets operating loss increased $874 million, “primarily driven by an increase in employee compensation expenses and a combination of other factors, none of which were individually significant”.
For the first six months of 2026, its 10-Q says the loss increased $1.4 billion, “primarily driven by increases in employee compensation expenses, third-party services fees, and a combination of other factors, none of which were individually significant”.
Where Waymo Appears in the Filings
Alphabet’s fourth-quarter 2025 release says operating income “included a $2.1 billion employee compensation charge for Waymo”, recognised “primarily reflected in research and development expenses, based on estimated stock valuation”. That release does not say which segment carried the charge.
The same release says that in February 2026, “Waymo announced an investment round of $16.0 billion, the significant majority of which was funded by Alphabet.” In its first-quarter 2026 release, Sundar Pichai said he was pleased to see Waymo surpass 500,000 fully autonomous rides a week.
Alphabet’s cash flow statements list proceeds from the sale of interest in consolidated entities of $3.2 billion in January to March 2026 and $3.8 billion for the first nine months of 2026, with none in the third quarter. The filings supplied do not name the entities involved.
Its 10-Q puts total noncontrolling interests in its consolidated subsidiaries at $7.1 billion on 30 June 2026, against $3.4 billion on 31 December 2025.
As we read the segment tables, the change is in the loss line, not the revenue line: quarterly revenue stayed between $344 million and $450 million across the eight quarters, while the quarterly loss went from $1.2 billion to $2.0 billion.
The largest quarterly loss in the series, $3.6 billion, came in October to December 2025, the quarter in which Alphabet says operating income included a $2.1 billion employee compensation charge for Waymo; the release does not say which segment carried that charge.
Alphabet’s first- and second-quarter 2026 10-Qs name employee compensation expenses as the main driver of the larger Other Bets loss, with third-party services fees added for the six-month period.
Alphabet Q4 2025 results release
“In February 2026, Waymo announced an investment round of $16.0 billion, the significant majority of which was funded by Alphabet.”
Three Implications
FOR ALPHABET’S PROFIT LINE By our sum, Other Bets lost $5.9 billion in the first nine months of 2026, against $3.9 billion a year earlier, while the segment’s revenue was $1,165 million against $1,167 million.
FOR WAYMO Alphabet’s filings say Waymo’s February 2026 round of $16.0 billion was funded in significant majority by Alphabet; they do not report Waymo’s own revenue or loss.
FOR OUTSIDE CAPITAL Alphabet’s cash flow statements list $3.8 billion of proceeds from selling interests in consolidated entities in the first nine months of 2026, and its 10-Q shows noncontrolling interests rising to $7.1 billion by 30 June; the filings do not name the entities.
The framework argues: “This is not a continuation of the cloud capex cycle.” It describes the subject of its analysis as the financing: how the money flows, where it cracks, what it buys and who can absorb it.
Alphabet’s segment tables put a number on one cost its core businesses absorb: $5.9 billion of Other Bets losses in the first nine months of 2026. The framework does not discuss Other Bets or Waymo.
What Is Not Established
Alphabet does not report Waymo’s revenue or operating loss on its own in these filings; Other Bets combines multiple operating segments, which Alphabet says are not individually material. This piece does not attribute the segment’s loss to any single business.
The third-quarter release gives no reason for the larger loss, and the 10-Q explanations quoted here cover earlier periods.
This Week In The AI Supercycle
Execution Fault Lines, Concentrated Demand, and Geopolitical Firewalls
This week’s issue: the AI build is not short of demand for its parts. It is short of cheap money, and its end revenue rests on a narrow base of large, often venture-funded buyers.
Alphabet’s Other Bets segment lost $2.0 billion in the third quarter on $372 million of revenue, according to its 28 October release. By our arithmetic, that is $5.50 of loss per $1 of revenue, and $5.9 billion of losses in the first nine months of 2026 on revenue that was flat against 2025.
A note on sourcing. Figures come from Alphabet’s quarterly results releases (SEC Form 8-K, Exhibit 99.1) from the fourth quarter of 2024 to the third quarter of 2026, including the release of 28 October 2026, and from its Forms 10-Q for the first and second quarters of 2026. Ratios, sums and percentage changes are our arithmetic; linked earlier pieces carry their own sources.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
