Alphabet Posts Record $112.1B Q2 Profit But First Free Cash Flow Deficit in 22 Years

According to MarketWatch and Nikkei newspaper on July 27, Alphabet reported Q2 net income of $112.1 billion, a fourfold increase year-over-year. However, $98 billion of this figure came from unrealized investment gains on holdings including SpaceX and other unrevealed positions, rather than actual cash flow.

Alphabet swung to a free cash flow deficit of $5.8 billion in Q2, marking its first such shortfall since its 2004 listing 22 years ago. Despite this, the company raised its full-year capital expenditure guidance to $195-$205 billion, up $15 billion from April estimates. The market responded with a 7% stock decline on July 23, as FactSet data showed Alphabet alone accounted for 92% of S&P 500 earnings growth.