Google (NASDAQ:GOOGL) parent company Alphabet reported its second quarter results headlined by US$84.74 billion in revenue, showcasing solid growth driven by its core search and cloud segments.
Alphabet’s revenue for Q2 surpassed the anticipated US$84.19 billion. Diluted earnings per share were US$1.89, slightly above the expected US$1.84, marking a 14 percent increase in revenue compared to the same period last year.
Ad revenue alone comprised more than half of the company’s total revenue, bringing in US$64.62 billion. That’s up from US$58.14 billion the previous year, when marketing budgets were tighter.
The company’s search revenue, which is contained within ad revenue, came to US$48.51 billion.
Meanwhile, Alphabet’s cloud revenue exceeded the US$10 billion mark for the first time, reaching US$10.35 billion and surpassing the projected US$10.16 billion target laid out by analysts.
“Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud,” said CEO Sundar Pichai in Alphabet’s Tuesday (July 23) press release. He also emphasized ongoing innovation in artificial intelligence (AI) and the importance of the company’s infrastructure and research teams in driving future opportunities.
Unlike the company’s other segments, YouTube ad revenue failed to eclipse the forecast US$8.93 billion despite reaching an increased US$8.66 billion level, up from US$7.66 billion last year.
Regardless, Chief Business Officer Philipp Schindler noted that strong growth in platform subscriptions helped YouTube remain the most-watched streaming platform for the 17th consecutive month. Schindler added that the company is working to leverage AI integration across its services to improve advertising experiences for customers and clients.
Similarly, outgoing Chief Financial Officer Ruth Porat remarked that YouTube’s growth included closing the gap on Shorts monetization and healthy watch time growth. Porat, who is the company’s longest-tenured CFO, will be transitioning to the newly created role of president and chief investment officer, managing the company’s “Other Bets” division.
The portfolio includes initiatives like the self-driving car unit Waymo, which Porat reported will be receiving a new US$5 billion multi-year injection to improve its services.
Alphabet shares closed Tuesday at US$181.79, but opened lower on Wednesday (July 24) at US$173.40. The company ended Wednesday at US$172.63, but is up close to 25 percent year-to-date.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.