“We believe a leaner operating model will allow us to move more quickly while also helping to offset the substantial investments we are making.”

In context

“supply chain to secure necessary components for future capacity. We are also signing cloud deals that will come online over the course of this year through 2027, allowing us to scale more quickly. These multiyear cloud deals and our infrastructure purchase agreements drove a $107 billion step up in our contractual commitments this quarter. Our investments will support our training needs for future models and, most importantly, provide us the inference capacity necessary to deliver personal and business agents to billions of people around the world, along with several other AI product experiences we are developing. As we grow our infrastructure spend, we remain committed to operating efficiently, and we recently shared internally that we plan to reduce the size of our employee base in May. We believe a leaner operating model will allow us to move more quickly while also helping to offset the substantial investments we are making. Moving to our financial outlook. We expect second quarter 2026 total revenue to be in the range of $58 to $61 billion. Our guidance assumes foreign currency is an approximately 2% tailwind to year-over-year total revenue growth based on current exchange rates. Turning to the expense and CapEx outlooks. We expect full year 2026 total expenses to be in the range of $162 to $169 billion, unchanged from our prior outlook. We continue to expect to deliver operating income this year that is above 2025 operating income. We anticipate 2026 capital expenditures, including principal payments on finance leases, to be in the range of $125 to $145 billion, increased from our prior range of $120 to $135 billion. This reflects our expectations for higher component pricing this year and, to a lesser exte”