Invest with Bjorn
Earnings Reviews
October 2026 earnings

Google, Microsoft
and ServiceNow.

My reading of the results, what stood out on the earnings calls, and the questions I’m watching next.

By Bjorn Ng · 29 October 2026 · Analyst expectations, opportunities and risks. No stock recommendations.

Open any review below. Everything stays on this page.
GOOGL · Q3 2026

Google

Cloud is growing quickly, but another quarter of negative free cash flow puts more weight on the spending risk.

What changed

Q3 revenue was $127.577bn, up 25%, and operating income $40.6bn, up 30%. Search & other reached $63.350bn and grew 12%, but its share fell from 55.3% to 49.7% as Cloud expanded faster. Search, YouTube and Network still made up 64.3% of sales. Cloud was $30.709bn (+103%), or 24.1% of revenue. The chart shows the first sub-50% mix reading in these five verified quarters, not a lifetime first. [7]

Revenue was slightly below the $127.91bn analyst consensus; normalised EPS was $2.67 versus $3.02 expected. An $8.7bn investment loss also weighed on GAAP EPS. Shares ended after hours at $292.50, down 9.97% from the prior close. [3] [4] [5]

Search share of consolidated revenue

Search and other share of Alphabet revenue over five quartersQ3 2025 55.3%, Q4 2025 55.4%, Q1 2026 55.0%, Q2 2026 52.8%, Q3 2026 49.7%. The latest is the first below 50% in this five-quarter comparison, not a verified lifetime first.Search & other / consolidated revenue55%50%55.3%Q3 ’2555.4%Q4 ’2555.0%Q1 ’2652.8%Q2 ’2649.7%Q3 ’26

Below half for the first time in these five verified quarters; lifetime first unverified. [11] [12] [13] [14]

What the call tells me

Management said Search queries grew fastest in five years. CFO Anat Ashkenazi cited foreign exchange as the largest factor in slower Search revenue growth and acknowledged lower AI Mode monetisation. Query growth signals engagement, but not what the new interactions earn. [6]

Cloud’s operating margin rose to 36.2% from 23.7%. TPU system sales contributed meaningfully to growth, but management gave no growth rate excluding hardware. Rented third-party capacity is expected to pressure Q4 margins as usage ramps. Growth and margin need to be read alongside sales mix and capacity costs. [6]

Cash flow and valuation

Operating cash flow of $42.290bn fell short of $51.355bn cash capex, leaving −$9.065bn FCF, versus −$5.855bn in Q2. Q3 included a $5.2bn European-fine payment and TPU inventory build. Excluding only the fine leaves an illustrative −$3.865bn, not a company-adjusted figure. Management expects much higher 2027 capex and gave no FCF recovery date. [7] [10] [6]

Alphabet quarterly operating cash flow, capital expenditure and free cash flowFour reported quarters from Q4 2025 through Q3 2026 on one common scale in billions of dollars. The baseline is zero, with negative values below. Operating cash flow was 52.402, 45.790, 39.069, and 42.290. Capital expenditure was 27.851, 35.674, 44.924, and 51.355. Free cash flow equals operating cash flow less capex: 24.551, 10.116, negative 5.855, and negative 9.065.$60$40$20$0−$10All series: $bn · FCF = operating cash flow − capex24.610.1−5.9−9.1Q4 ’25Q1 ’26Q2 ’26Q3 ’26
Operating cash flowCapital expenditureFree cash flow

USD bn. Bars show operating cash flow and cash capex; line is free cash flow (OCF less capex). TPU inventory and infrastructure spending pressure cash flow.

Google Finance showed $290.09 at 04:02 EDT on 29 October, 10.7% below the prior $324.89 close. That equals 19.1× calendar-2027 analyst adjusted EPS of $15.19; post-result revisions are unverified. Price · [8]

Analyst consensus20262027
Revenue$500.3bn$627.8bn
Adjusted EPS$11.89$15.19
P/E at $290.0924.4×19.1×

S&P Global consensus via Stock Analysis. Both forecast years end 31 December. Adjusted EPS excludes some items in GAAP earnings.

How this compares with historical P/E readings

The provider’s year-end forward P/E readings were 26.6× in 2021, 17.9× in 2022, 21.7× in 2023, 22.1× in 2024 and 29.4× in 2025. The 29.4× was measured at the end of 2025; it is not today’s P/E or a prediction that the multiple will rise.

The provider’s share price rose from $188.20 at the end of 2024 to $312.39 at the end of 2025, faster than the expected profit behind its ratio. That is why the multiple rose. These historical readings use different forecast dates and should not be treated as an exact measure of today’s discount. [9]

The risks

  • Search may earn less from each interaction. AI Mode usage can grow while its monetisation remains below traditional Search.
  • Spending could keep cash flow under pressure. Investment is expected to rise again in 2027, and management has not given a date for free cash flow to recover.
  • Cloud’s recent margins may not last. Hardware sales helped this quarter, while greater use of rented capacity is expected to pressure margins next quarter.
  • Forecasts can come down. The analyst-based P/E only holds if the expected earnings arrive; lower earnings estimates would make the same share price look more expensive.

What I’m watching

Next quarter can clarify Search monetisation as AI Mode grows, Cloud margins as rented capacity ramps, and the planned rise in 2027 capex. Management has not specified when free cash flow will recover. [6]

Search and Cloud demand is strong; durable cash returns on the infrastructure bill remain to be demonstrated.

Sources & Method
  1. 2023 Annual Report
  2. 2025 Form 10-K
  3. Longbridge consensus snapshot
  4. Alphabet release
  5. AP earnings coverage
  6. Q3 call transcript
  7. Cash-flow tables
  8. S&P Global annual consensus, rechecked 29 Oct
  9. Historical forward P/E, annual fiscal-year snapshots
  10. Alphabet Q2 2026 10-Q: European fine paid in July
  11. Alphabet Q3 2025: historical Search revenue and consolidated revenue
  12. Alphabet Q4 2025: historical Search revenue and consolidated revenue
  13. Alphabet Q1 2026: historical Search revenue and consolidated revenue
  14. Alphabet Q2 2026: historical Search revenue and consolidated revenue

Price reference: $290.09 at 04:02 EDT on 29 October, cross-checked on Google Finance. The prior regular-session close was $324.89. Price-based P/E calculations divide the reference price by S&P Global adjusted-EPS consensus for the stated calendar year.

Annual EPS forecasts were rechecked on 29 Oct and are unchanged from the 26 Oct snapshot; individual post-report revisions are unverified. The headline P/E divides the $290.09 quote by analyst adjusted EPS for calendar FY2027. The consensus figures are analyst estimates and are not company guidance. Historical annual forward-P/E snapshots come from Stock Analysis / S&P Global, but the page does not document each archived consensus denominator vintage or the exact construction of its separate current estimate. Company guidance, consensus and commentary are separate. GAAP includes costs that adjusted measures exclude.

Public X searches did not yield a verifiable set of current posts; no social-media consensus is claimed. The article separates reported results, management commentary, third-party consensus and interpretation. It does not provide an investment recommendation or a personal target price.

MSFT · Q1 FY2027

Microsoft

Azure growth accelerated. The question is how much cash remains after paying for the capacity to meet that demand.

What changed

Microsoft sells the software and cloud services many businesses run on. This quarter, revenue rose 19% to $92.3bn. Azure grew 48%, up from the prior quarter’s restated 42%. Adjusted earnings of $4.89 a share beat the $4.73 consensus.

The shares finished the completed after-hours session up 2.9%, although an earlier gain faded. So this was not an outright post-earnings fall. Strong results gave investors something to like; the cost of delivering that growth remains a concern.

What the call tells me

Microsoft said customer demand still exceeds the capacity it can supply. Better use of existing servers helped Azure grow faster, but some new GPU capacity has moved into the second half of the fiscal year. Growth depends partly on when those servers become available.

Copilot usage is rising quickly. Management did not give a separate revenue or profit figure for it. More usage is encouraging, but it does not yet show how much money Microsoft makes from each user.

Cash flow and valuation

Operating cash flow reached $58.0bn. Cash spending on equipment took $39.4bn, leaving $18.6bn of free cash flow—down 27% from a year earlier. Cloud gross margin fell to 66%, with about 65% expected next quarter. Management expects next-quarter capital spending above $50bn; that broader spending measure includes leases and differs from cash equipment purchases.

Microsoft quarterly cash from operations, cash spent on equipment and free cash flowFrom Q2 FY26 to Q1 FY27 operating cash flow was 35.8, 46.7, 55.4 and 58.0 billion dollars; cash spent on property and equipment was 29.9, 30.9, 35.8 and 39.4 billion; free cash flow was 5.9, 15.8, 19.6 and 18.6 billion.US$B604020035.829.946.730.955.435.858.039.45.915.819.618.6Q2 FY26Q3 FY26Q4 FY26Q1 FY27Operating cashCash spent on equipmentFree cash flow

Cash generated versus cash spent on equipment. Free cash flow is what remains; the total capital-spending measure also includes leases.

Analyst expectations

27.7× expected earnings = $546.389 ÷ $19.76 adjusted EPS. The forecast covers July 2026–June 2027, Microsoft’s FY2027. The price is the 28 October completed after-hours snapshot, 19:59 EDT.

Consensus was collected before the release; post-results revisions are unverified. This is an analyst-based P/E, not a personal fair-value estimate.

The risks

  • Capacity can arrive late while spending keeps rising. Delays to new servers can limit Azure sales even when customer demand is strong.
  • AI growth may take time to pay for itself. Copilot usage is rising, but separate revenue and profit figures remain undisclosed.
  • Margins and cash flow could stay under pressure. More equipment spending and lower cloud margins mean sales growth does not automatically leave more cash for shareholders.
  • The valuation relies on continued growth. Analyst forecasts collected before the results may change as the cost of meeting demand becomes clearer.

What I’m watching

Microsoft’s existing customers give it a large base for selling AI services. The next test is whether that demand produces enough revenue and cash to cover the equipment bill. I’m watching Azure capacity, cloud margins and whether Copilot’s growing use becomes clearer in reported sales.

Historical valuation context

The third-party rolling next-12-month P/E was 27.0× on 27 October, against a ten-year median of 28.2×. That suggests a less demanding multiple than in 2023–24, but it uses a different forecast period from the FY2027 calculation above.

Third-party annual snapshots of Microsoft rolling NTM forward P/ESnapshots were 24.6 times in 2022, 32.3 in 2023, 32.2 in 2024, 28.8 in 2025, and 27.0 as of October 27, 2026. The provider reports a 28.2 ten-year median.40×30×20×24.6×32.3×32.2×28.8×27.0×202220232024202527 Oct202610y median 28.2×
Sources & Method
  1. Microsoft FY2026 annual report: annual track record and business mix.
  2. Microsoft Q1 FY27 release: results, segment mix and cash-flow statement.
  3. Microsoft Q1 FY27 metrics: recast quarterly growth history.
  4. Reuters / LSEG consensus via Schwab: quarter estimates.
  5. Market reaction coverage: early after-hours move.
  6. TheStreet trading update: later pullback from the high.
  7. Q1 FY27 earnings call transcript: Copilot, Azure, capex, Q&A and outlook.
  8. Microsoft Q2 FY26 call: comparable cash-flow quarter.
  9. Microsoft Q3 FY26 call: comparable cash-flow quarter.
  10. Microsoft Q4 FY26 call: comparable cash-flow quarter.
  11. S&P Global Market Intelligence forecast via StockAnalysis: annual consensus, checked 27 Oct before the release.
  12. Longbridge: quarterly analyst estimates retrieved 29 Oct.
  13. Superworth: third-party historical rolling NTM P/E method and snapshots.
  14. StockAnalysis quote: public close and after-hours corroboration.

Quote data supplied by Longbridge: regular close $531.01 at 28 Oct 20:00:01 UTC; completed after-hours $546.389 at 28 Oct 23:59:59 UTC (+2.90%); later overnight indication $549.40 at 29 Oct 01:59:15 UTC (09:59:15 SGT). The later figure is not a regular-session close. Analyst forecasts were last checked 27 Oct before the earnings release; the report shows only the price divided by analyst FY2027 EPS, with no personal EPS estimate, fair value or target price.

NOW · Q3 2026

ServiceNow

AI usage is rising, but slower contracted-growth guidance and weaker reported margins deserve a closer look.

What changed

ServiceNow sells software that helps businesses organise and automate work. Revenue grew 20.5% to $4.1bn, but adjusted profit of $1.00 a share missed the roughly $1.02 forecast. The bigger concern was slower growth ahead in contracted subscription revenue. The shares fell 18.1% in the completed after-hours session, from $150.13 to $122.91.

What the call tells me

Management said AI usage rose more than 13 times year to date, while new AI annual contract value grew 65%. These are signs that customers are trying and committing to the products. They do not tell us how much extra revenue or profit ServiceNow has already earned. That was the useful question in the call: when will greater use show up clearly in the financial results?

Some customer renewals happened earlier than expected, helping this quarter at the expense of the next. The cRPO measure—contracted revenue expected over the next 12 months—is guided to grow 18.5% next quarter, down from 21%, both excluding currency effects. Management explained timing and accounting differences, but those explanations still need to be backed up by future revenue.

Cash flow and valuation

Free cash flow has grown over time, as the chart shows. This quarter, operating cash flow of $839m less $91m of equipment spending left $748m. The company’s adjusted figure was higher, at $822m, after adding back acquisition-related costs.

Share-based pay also matters: it was $633m this quarter. It does not immediately use cash, but issuing shares can dilute existing owners. That is why I look at reported profit, cash flow and share-based pay together.

USD billions; FCF = OCF less CapEx.

FY2027 (calendar year ending 31 December 2027) analyst consensus is $5.00 adjusted EPS. At $122.91 in the 28 October after-hours snapshot (19:59 EDT), that is 24.6×; it is neither guidance nor fair value. Consensus snapshot is dated 27 October, before the results; revisions are unverified. Revenue/EPS consensus basis.

The risks

  • AI usage may not turn into paid revenue quickly enough. Contract announcements and consumption growth are encouraging, but neither is the same as revenue already earned.
  • Slower contracted growth may persist. Early renewals explain some timing differences, but the next results need to show whether underlying demand remains strong.
  • Delivering larger deals can cost more. Deployment support and cloud costs may put pressure on margins as the business expands.
  • Adjusted figures can hide costs that matter to owners. Share-based pay and acquisition adjustments help explain the gap between reported profit and adjusted results; issuing more shares can dilute existing shareholders.

What I’m watching

Watch whether AI ACV and consumption convert into subscription revenue and renewals; whether cRPO stabilizes after timing and contract-mix effects; and whether deployment support scales without lasting margin or cash pressure. Compare GAAP with adjusted EPS, FCF after CapEx with adjusted FCF, and stock compensation with diluted-share growth. Competition, cloud costs, acquired intangibles, and integration may constrain results.

Sources & Method
  1. 2024
  2. 2025
  3. 2026
  4. 5-for-1 split
  5. MarketBeat
  6. Timestamped quote
  7. Close history
  8. Earnings call
  9. Split filing
  10. 2025 Form 10-K, cash flow and SBC
  11. StockAnalysis / S&P Global historical forward P/E and ratios
  12. 2023 Annual Report, 2021–23 cash flow

Price: Longbridge and public quote pages, 28 Oct 19:59 EDT / 29 Oct 07:59 Singapore; this is a completed after-hours snapshot, not a live quote.

Annual forecasts predate the earnings release; post-report revisions are unverified. Forward P/E divides the stated price by analyst adjusted EPS for the labelled fiscal year; it is neither a fair-value estimate nor a rolling twelve-month forecast. Company guidance, consensus and commentary are separate. GAAP includes costs that adjusted measures exclude.

Historical forward P/E context

StockAnalysis / S&P Global lists these annual fiscal-year-end forward P/E observations. They are not trailing P/E or daily ranges, and the provider does not disclose the estimate vintage or forecast horizon for each historical point. Do not compare them directly with today’s explicit FY2027 adjusted-EPS calculation.

Annual fiscal-year-end observations
December year-endForward P/E
202196.16×
202245.27×
202359.51×
202467.74×
202539.52×

Source: StockAnalysis / S&P Global ratios

A personal note from me

Hey guys,

When a stock drops more than 10%—like Google and ServiceNow in these earnings reactions—it’s tempting to think, “Just buy the dip.”

But a lower price alone doesn’t tell you whether the business is still worth buying, or how much of your portfolio you’re comfortable putting into it.

So I think it’s worth pausing before buying again. More importantly, understand what changed in the business, how much you already own, and how much more you’re comfortable putting into it. Otherwise, every dip can become another purchase, until you’re holding more than you intended.

And if it falls further, then what’s your plan?

That’s why I keep talking about having your own personal portfolio gameplan. Having that worked out gives you a much better basis for what to do next, instead of figuring it out every time the price moves.

Bjorn

Learn more about building your personal portfolio gameplan with me