Google’s parent Alphabet has reported second-quarter revenue that beat Wall Street’s expectations, driven by its cloud-computing services and search advertising.
Sales, excluding partner payouts, were approximately A$107.88 billion in the second quarter — analysts had projected a figure of A$106.88 billion. Net income was A$2.86 per share, compared with analyst estimates of A$2.78 per share.
Alphabet’s capital expenditures in the second quarter though were higher than what analysts had predicted, as it continued to invest in artificial intelligence. The company spent A$19.95 billion, compared with estimates of A$18.44 billion.
Google Cloud reported a profit of A$1.77 billion. It still slots in behind Amazon and Microsoft in the cloud computing market, but investors are believed to be eyeing Google Cloud as the unit with the most potential for growth at Alphabet.
“Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud. We are innovating at every layer of the AI stack,” Pichai stated in the earnings report.
Quarterly search advertising revenue was $73.32 billion, while YouTube posted a revenue of A$13.09 billion.
“We’ve certainly seen the benefit of our strength in AI, AI infrastructure, as well as generative AI solutions for cloud customers,” Alphabet chief investment officer Ruth Porat said on a call with media. “There is no question customers are turning to us as they are building out their capabilities.”
Alphabet’s Other Bets — a collection of units that includes the life sciences business Verily and the self-driving car project Waymo — brought in A$551.78 million in revenue while posting an operating loss of A$1.71 billion.
Alphabet also reported that it has $152.23 billion in cash, equivalents and marketable investments, down from the $163.27 billion it reported in the first quarter.
In what may be a setback Alphabet this year, plans for rumoured multi-billion acquisitions of HubSpot and Wiz which would have given it a better footing in the cloud and cybersecurity space have both now ceased.
