Alphabet’s Waymo expansion remains small in revenue as losses widen

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Waymo expansion and losses

Highlights

Alphabet's Other Bets segment, including Waymo, reports Q3 revenue of $372 million (up 8%) but widens operating loss to $2.05 billion from $1.43 billion year over year.
Alphabet stock drops almost 10% in extended trading after Q3 earnings and revenue miss expectations, capital expenditures forecast reaffirmed at $195–$205 billion for 2024, with negative free cash flow over $9 billion.
Waymo expands U.S. robotaxi operations to 15 cities and secures a $5 billion term loan, planning international launches in Germany (2027), Canada, Singapore, and Spain.

Quarterly figures highlight Waymo’s scale challenge

As reported by CNBC, Alphabet said in its third-quarter earnings report on Wednesday that its Other Bets segment, which includes Waymo, generated $372 million in revenue, up 8% from a year earlier. Even with that increase, the segment accounts for only 0.3% of total company sales.

The cost of that growth remains high. Operating loss in Other Bets widens to $2.05 billion in the quarter from $1.43 billion a year earlier, with the unit also housing drug design research business Isomorphic, which is using Google’s Gemini 4 Argon AI models.

Alphabet’s broader financial picture adds to investor scrutiny. The company reports earnings and revenue below expectations on Wednesday, sending the stock down almost 10% in extended trading, while maintaining its full-year capital expenditures forecast at $195 billion to $205 billion, largely for AI infrastructure, and posting negative free cash flow of more than $9 billion for the quarter.

Global rollout adds pressure on investment returns

Chief Executive Sundar Pichai highlights Waymo’s expansion near the end of his introductory remarks on the earnings call, underscoring the company’s lead in the U.S. robotaxi market as competition develops from Amazon’s Zoox and Tesla. Pichai says Waymo now operates in 15 major U.S. cities and has recently opened service to the public in San Antonio, San Diego and Tampa, with planned expansions into Canada, Germany, Singapore and Spain.

Waymo says in August that it plans to roll out robotaxi rides in Germany in 2027, marking its third international market and first in the EU. On the global stage, its toughest competition comes from Baidu’s Apollo Go in China.

Alphabet is also continuing to fund the business externally and through debt markets. Earlier this month, Waymo announces that it closes a $5 billion term loan, its first debt financing, after saying in February that it raised $16 billion at a $126 billion valuation in a funding round led by Alphabet and backed by investors including Andreessen Horowitz, Fidelity, T. Rowe Price, Sequoia Capital and Kleiner Perkins.

Operationally, the company is still broadening service coverage. Last week Waymo starts offering driverless rides to and from Las Vegas airport after previously announcing airport service in five other cities, including San Francisco and Phoenix, while Pichai says the company has now driven more than 300 million fully autonomous miles. Tesla, by comparison, says on its website that vehicles in its Robotaxi network have completed about 3.8 million unsupervised miles, and Elon Musk says last week that the business should become a meaningful revenue contributor by the second half of 2027.

In our earlier article on the mounting costs of the U.S. AI data center buildout, we explained how high interest rates, inflation, construction delays, and power constraints are making it harder to turn ambitious infrastructure plans into reality. We also noted that only a fraction of proposed projects look credible, while investor confidence is being tested by cost overruns, financing hurdles, and growing local opposition to new facilities.

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