Waymo holds a dominant position in the United States and is expanding overseas, but in terms of revenue, it is still virtually insignificant to its parent company Alphabet. Meanwhile, Alphabet is investing a large amount of cash in this business to support its growth.
The financial report for the third quarter, released on Wednesday Alphabet, showed that the Other Bets division, which includes Waymo, had revenue of $372 million for that quarter, an increase of 8% compared to the same period last year, but it only accounted for 0.3% of the total sales.
The cost of this revenue is not small. The department's operating loss for that quarter increased from $1.43 billion in the same period last year to $2.05 billion. This business unit also includes the drug design and research company Isomorphic, which is using Google's Gemini 4 Argon AI model.
At the end of his opening remarks at the financial report conference call, the Chief Executive Officer Sundar Pichai highlighted the expansion of Waymo. Waymo holds a clear leading position in the US robot taxi market but is facing new competition from Zoox under Amazon and Tesla. In August, Waymo announced plans to launch robot taxi services in Germany in 2027, which will be its third international market and also its first in the European Union.
Pichai said during the conference call: " Waymo is currently operating in 15 major cities in the United States, and has recently just launched services to the public in San Antonio, San Diego, and Tampa. At the same time, there are plans to expand to Canada, Germany, Singapore, and Spain."
Globally, the strongest competition that Waymo faces comes from Baidu Apollo Go of China.
For many years, Alphabet has been able to operate Waymo as a marginal project, while its core online advertising business generated billions of dollars in profit each year and produced a large amount of cash. However, with the company now making substantial investments in artificial intelligence, free cash flow has turned negative, and Wall Street has begun to show signs of concern.
The performance and revenue announced on Wednesday Alphabet fell short of expectations, and the stock price dropped by nearly 10% in after-hours trading. The company maintained its annual capital expenditure forecast between $195 billion and $205 billion, mainly for AI infrastructure, and disclosed that its free cash flow for this quarter was negative, exceeding $9 billion.
Earlier this month, Waymo announced the completion of a $5 billion term loan, which marked its first debt financing. In February of this year, the robotics taxi company announced the completion of a round of financing, with a valuation of $126 billion and a financing amount of $16 billion. The financing was led by Alphabet, with participation from Andreessen Horowitz, Fidelity, T. Rowe Price, Sequoia Capital, Kleiner Perkins, and other institutions.
Last week, Waymo began providing driverless travel services to and from Las Vegas Airport. Previously, the company had announced that it was offering airport services in five other cities, including San Francisco and Phoenix.
Pichai said on Wednesday: 'The development momentum of Waymo is very good. We have now completed over 300 million miles of fully autonomous driving.'
Tesla stated on its website that its autonomous vehicles in the Robotaxi network have completed approximately 3.8 million miles of "unsupervised" driving, meaning there were no human drivers in the vehicles. Tesla CEO Elon Musk said during the company's earnings call last week that the Robotaxi business should become a "significant" source of revenue in the second half of 2027.
