Alphabet's Q2 results exceed revenue and earnings expectations, driven by strong cloud performance
Alphabet, Google's parent company, has reported its second-quarter results on Tuesday, meeting analyst expectations for revenue and earnings but missing on YouTube advertising revenue, as noted by CNBC.
After-hours trading saw Alphabet shares dip by about 2 percent.
The company recorded earnings of $1.89 per share, surpassing the anticipated $1.84 per share. Revenue reached $84.74 billion, exceeding the forecasted $84.19bn.
Despite a miss, YouTube advertising revenue grew to $8.66bn from $7.66bn in the same quarter last year, falling short of the $8.93bn estimate. Google Cloud revenue outperformed expectations at $10.35bn, compared to the projected $10.20bn.
Traffic acquisition costs (TAC) were slightly below estimates at $13.39bn versus the expected $13.54bn.
Alphabet's overall revenue rose 14 percent year over year, driven by gains in search and cloud services. The cloud division surpassed $10bn in quarterly revenue for the first time, also achieving $1bn in operating profit.
The company’s ad revenue increased to $64.62bn from $58.14bn last year, although the growth rate slowed due to inflation and higher interest rates, which tightened marketing budgets in 2022 and 2023.
Net income climbed to $23.6bn, or $1.89 per share, up from $18.4bn, or $1.44 per share, in the same period last year.
The “Other Bets” unit, including the self-driving car company Waymo, brought in $365m, up from $285m a year earlier. Alphabet’s outgoing finance chief Ruth Porat announced a new $5bn multiyear investment in Waymo during the company's second-quarter earnings call on Tuesday.
She highlighted Waymo as an “important example” of Alphabet’s long-term investment strategy.
During the second quarter, Waymo expanded its service to all users in San Francisco, marking its second citywide rollout following Phoenix. CEO Sundar Pichai reported that Waymo now conducts 50,000 weekly paid public rides, mainly in San Francisco and Phoenix.
“Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud,” Pichai stated in the earnings release.
“We are innovating at every layer of the AI stack. Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead.”
