Gemini hits 1 billion users as Alphabet misses forecasts

Google's Gemini app has passed 1 billion users, Alphabet said with its third-quarter results on Wednesday, October 28. The company called Gemini the fastest-growing product in its history, according to its earnings release. On the call with analysts, CEO Sundar Pichai said first-party model APIs now process nearly 32 billion tokens per minute. That is up 40% from the previous quarter and more than four times the level of a year earlier, according to call highlights.finance.yahoo.com+1

The usage numbers came in a mixed quarter. Revenue rose 25% to $127.58 billion but fell short of analyst forecasts. Shares dropped more than 10% after hours, as Alphabet posted its first miss on both revenue and earnings in nearly four years, CNBC reported.cnbc.com

An agent for consumers, with ads

Google said it will bring its Gemini agent, launched for businesses earlier this month, to consumers later this year. "Later this year, we will bring that same experience to consumers, obviously starting with the one billion users in our Gemini app," Pichai said, according to a transcript. He added that the company will "extend these agentic experiences beyond search in the Gemini app to Chrome, Android, and our workspace products as well," Android Headlines reported.androidheadlines.com+1

Chief Business Officer Philipp Schindler confirmed that ads will come to agents. He gave an example of an agent answering, "Here's the insurance product we found, and here's another strong option," and said Google is "confident that we can actually provide really interesting, compelling advertising models for agentic use cases," according to Android Headlines. Pichai also introduced the Gemini 4 Carbon model and said it beats the recently released Argon "on almost every domain," CNBC reported.cnbc.com+1

Cloud surges as ads fall short

Google Cloud revenue rose 103% to $30.7 billion. Search and other revenue grew 12%, and the company said search query growth was the fastest in five years, the release said. Advertising revenue of $82.01 billion still came in about $1.41 billion below expectations, and free cash flow was negative $9.07 billion, Reuters reported. Net income fell to $26.17 billion from $34.98 billion a year earlier, partly because of an $8.7 billion loss on equity investments, AP reported.sec.gov+2

Spending keeps climbing

Alphabet kept its 2026 capital spending forecast at $195 billion to $205 billion. It expects spending to rise to more than $300 billion in 2027, CNBC reported. "We continue to expect our capex to increase significantly in 2027, and will provide further details on our Q4 call," said CFO Anat Ashkenazi.cnbc.com

Not every analyst was impressed. "The cloud business was the only business that beat," Jefferies analyst Brent Thill said, according to CNBC. "Everything else missed."cnbc.com