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Google’s parent company, Alphabet, released its second-quarter results after the market closed on Tuesday, meeting analysts’ expectations for revenue and profit but falling short in YouTube advertising revenue.
Following the announcement, Alphabet shares rose about 1% in after-hours trading.
Here’s how the company performed compared to analysts’ estimates surveyed by LSEG:
Earnings: $1.89 per share versus the expected $1.84 per share
Revenue: $84.74 billion versus the expected $84.19 billion
Additional key figures Wall Street was monitoring:
YouTube advertising revenue: $8.66 billion versus $8.93 billion according to StreetAccount
Google Cloud Revenue: $10.35 billion versus $10.20 billion according to StreetAccount
Traffic Acquisition Costs (TAC): $13.39 billion versus $13.54 billion according to StreetAccount
Alphabet’s revenue increased by 14% year-over-year, driven by both search and cloud, which surpassed $10 billion in quarterly revenue and $1 billion in operating profit for the first time.
The company reported $64.62 billion in advertising revenue, up from $58.14 billion a year ago, indicating that Google’s advertising business continues to grow, albeit at a slower pace than in the first quarter due to rising inflation and interest rates impacting marketing budgets in 2022 and 2023.
Although YouTube’s advertising revenue missed estimates, it still grew to $8.66 billion from $7.66 billion in the year-ago quarter. Despite being the world’s largest video platform, YouTube faces growing competition from social video sites like TikTok.
Net income increased to $23.6 billion, or $1.89 per share, from $18.4 billion, or $1.44 per share, in the same quarter last year.
The company’s “Other Bets” unit, which includes its self-driving car company Waymo, generated $365 million, up from $285 million a year ago. Alphabet CFO Ruth Porat announced on the company’s earnings conference call that they are committing to a new $5 billion, multi-year investment in Waymo.
Alphabet saw several expansion updates in the second quarter, including its self-driving car unit Waymo, which opened its service to all users in San Francisco. This was Waymo’s second city launch, following its debut in the Phoenix metro area in 2020.
During the company’s earnings conference call, CEO Sundar Pichai stated that Waymo currently operates 50,000 paid rides per week on public transit, primarily in San Francisco and Phoenix.
“Our strong performance this quarter highlights continued strength in search and momentum in the cloud,” Pichai said in the earnings release. “We are innovating at every level of the AI stack. Our long-standing infrastructure leadership and internal research teams position us well as the technology evolves and as we pursue the many opportunities ahead.”
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