Why did Alphabet's net profit run so far ahead of operating profit?

Alphabet, the parent company of Google, reported revenue of USD 120bn in Q2 2026, up 24.2% from USD 96.4bn a year earlier. Operating profit reached USD 40.8bn, so the operating margin edged up to 34.0% from 32.4%. Net profit came to USD 112bn, against USD 28.2bn in Q2 2025. That gives a net margin of 93.7%, which means the company kept almost all of its revenue as profit. Operations alone cannot produce that. Figures in USD, consolidated, US GAAP.

Operating profit explains only a part of the net result. The rest came from below the operating line, where a company with large investment holdings can book valuation gains and tax effects. How much of that part came from valuation gains and how much from tax effects is not clear. The balance sheet moved too: equity rose 76.5% to USD 640bn, total assets reached USD 922bn from USD 502bn, and cash stood at USD 55.9bn. The equity ratio slipped to 69.5% from 72.3%. I would judge the business by the operating line and not by a net margin like this one.