Google Cloud posted more than $20 billion in quarterly revenue for the first time in Q1 2026, a 63% increase year-over-year, driven largely by demand for AI products. Despite the record figure, Alphabet CEO Sundar Pichai acknowledged on the company’s April 29 earnings call that revenue could have been even higher had Google been able to meet all customer demand.
“Obviously, we are compute constrained in the near-term,” Pichai told analysts. “Our cloud revenue would have been higher if we were able to meet that demand.”
AI solutions were the largest contributor to growth. Products built on Google’s generative AI models grew nearly 800% year-over-year, while Google Gemini Enterprise grew 40% quarter-over-quarter. AI token usage via Google’s API reached 16 billion tokens per minute in Q1, up from 10 billion in Q4 2025. The Google Cloud Platform, which includes infrastructure, data analytics, AI/ML tools, and Google Workspace, grew faster than the overall Cloud division.
Pichai also highlighted deal momentum: new customer acquisition doubled year-over-year, and the number of deals valued between $100 million and $1 billion also doubled. The company signed multiple contracts exceeding $1 billion. Existing customers outpaced their initial spending commitments by 45% quarter-over-quarter.
Google Cloud’s backlog reached $462 billion during the quarter, doubling from the prior period. The company said it expects to work through approximately 50% of that backlog over the next 24 months. Pichai framed the backlog as a sign of differentiated demand, though investors on the call raised concerns about how Google allocates cloud capacity.
Much of the company’s revenue potential is tied to infrastructure services and, in some cases, the direct sale of TPU hardware. Pichai said Google evaluates investments using a return on capital framework to guide continued spending on infrastructure development.
Source: TechCrunch