Growth is changing.
Earnings need a separate lens.

Forecast issued 2026-10-29 · Data through 2026-09-30 · 49 revenue quarters · All available quarters included in final refit

Earlier summary (2026-10-29): Alphabet's Q3 revenue reached $127.58B. The updated model allows the underlying growth rate to rise or fall, while the earnings model separates operating margins, investment gains, taxes, preferred dividends and diluted shares.

What changed after earnings

The October 14 forecast was $119.71B, with a $114.93B–$124.48B range. Actual revenue was $127.58B, outside that range. Its estimation sample ended in Q1: Q2 remained withheld even for forward forecasts. The revised forecast refits through Q3 after chronological validation.

Predictions to check at the next four earnings releases

These predictions are frozen as of October 29. Revenue is in billions of dollars; EPS is diluted GAAP dollars per share. Ranges are approximate 95% prediction ranges estimated from historical forecast errors.

A growth rate that can evolve

We compare seasonal growth, a fixed log-linear trend with quarterly effects, and three smooth time-varying trends. The selected model is dynamic_16. The dynamic candidates fit log(revenue) = trend + quarter effect + error. A penalty on second differences of the trend shrinks unnecessary changes in growth, while permitting persistent acceleration. Future growth gradually returns toward its recent eight-quarter average; acceleration is not extrapolated indefinitely.

At every historical forecast origin, a separate inner chronological test chooses the model using only earlier outcomes, across horizons one through four. The final choice is refitted on all observations through Q3. This avoids selecting a model on training fit or on the latest miss alone.

Unpacking the $2.12 EPS result

EPS = (operating income + equity gains/losses + other non-operating income − income taxes − preferred dividends) ÷ diluted shares. Q3 diluted shares were 12.368 billion.

Taxes and preferred dividends are deductions. This exact pre-rounding accounting bridge differs from a hypothetical after-tax add-back. Alphabet separately disclosed that the equity loss reduced EPS by $0.55 after its associated tax benefit.

EPS forecast assumptions and sensitivities

Selected EPS model: components_0.8. Component candidates exponentially smooth operating margins and non-equity other income, use the median effective tax rate of the last eight quarters, and hold diluted shares and preferred dividends at their latest levels. They assume zero net equity investment gains or losses. A seasonal EPS baseline is also tested.

The component scenario is conditional on neutral investment marks; it is not an assertion that investment gains have an expected value of zero. The broad GAAP ranges include historical investment shocks. They may extend below zero and do not bound every possible valuation shock.

Margin and tax rates are proportions (0.320 = 32%). Other non-equity income, preferred dividends and diluted shares are held to the documented component assumptions.

For the next quarter, holding other inputs fixed: an extra $1B of revenue adds about $0.021 EPS; one percentage point of operating margin adds $0.096; a $10B pre-tax equity gain or loss changes EPS by roughly ±$0.66 using the assumed tax rate. More diluted shares reduce positive EPS proportionately.

Validation and limits

The tables above describe each fixed candidate. The table below evaluates the complete selection procedure, choosing afresh at each origin. Revenue targets span Q3 2022–Q3 2026; reported EPS targets span Q1 2023–Q3 2026. These are different comparisons; the final winner’s historical error is not the error of the selection procedure.

Older diluted shares are sometimes inferred from rounded EPS. Missing Q4 shares are approximated using annual and quarterly duration-weighted averages; Q4 EPS reconstructed this way is excluded from EPS scoring. EPS is never derived by subtracting cumulative EPS. These limitations affect the EPS training history; the latest quarter uses reported shares and EPS.

How future results will be scored

Compare each frozen target with the first reported consolidated revenue and diluted GAAP EPS for that period. Record signed errors, revenue absolute percentage error, EPS absolute error, and whether each 80% and 95% range covered the result. Reconcile EPS misses to operating margin, investment marks, other income, tax, preferred dividends and diluted shares. Keep restatements separately; do not replace this vintage with a refit. No earnings announcement dates are assumed.