GOOG · 10-Q · 2026Q2 · Full report
Operating Expense Trends
Alphabet Inc. · 2026-07-23 · Importance 52 · Surprise 30 · Contradicted
Second-quarter operating expenses increased $7.0 billion year over year to $33.1 billion, primarily due to higher employee compensation, advertising and promotional spending, and depreciation. Research and development expense increased $4.4 billion to $18.2 billion, including $2.9 billion of higher employee compensation and $592 million of higher depreciation. Sales and marketing expense rose $1.3 billion to $8.4 billion, driven by $764 million of additional advertising and promotion and $402 million of higher employee compensation. General and administrative expense increased $1.3 billion to $6.5 billion, including a $1.5 billion PriceRunner legal charge within expenses related to legal matters.
Key facts
- Operating expenses for the three months ended June 30, 2026 were $33,083 million ($33.083 billion), an increase of $6.965 billion year over year. source
- R&D expenses increased $4.4 billion for the three months ended June 30, 2026 versus prior year, driven by employee compensation increases of $2.9 billion and depreciation increases of $592 million. source
- General and administrative expenses increased $1.3 billion for the three months ended June 30, 2026, which included a $1.5 billion charge related to a certain legal matter. source
- Research and development expenses for the three months ended June 30, 2026 were $18,219 million ($18.219 billion). source
- Sales and marketing expenses for the three months ended June 30, 2026 were $8,403 million ($8.403 billion). source
- General and administrative expenses for the three months ended June 30, 2026 were $6,461 million ($6.461 billion). source
- Sales and marketing expenses increased $1.3 billion for the three months ended June 30, 2026, including $764 million higher advertising and promotional activities and $402 million higher employee compensation expenses. source
- Alphabet-level activities expense for the three months ended June 30, 2026 was $(5,789) million (expense of $5.789 billion), primarily reflecting shared AI R&D. source
Impact estimates
| metric | direction | stage | expected | basis |
|---|---|---|---|---|
| operating_income | negative | realized | -15.2% | Research and development expenses for the three months ended June 30, 2026 were $18,219 million ($18.219 billion). |
| operating_income | negative | realized | -5.8% | Operating expenses for the three months ended June 30, 2026 were $33,083 million ($33.083 billion), an increase of $6.965 billion year… |
| operating_income | negative | realized | -3.7% | R&D expenses increased $4.4 billion for the three months ended June 30, 2026 versus prior year, driven by employee compensation increases… |
| operating_income | negative | realized | -1.1% | General and administrative expenses increased $1.3 billion for the three months ended June 30, 2026, which included a $1.5 billion charge… |