Google parent company Alphabet (GOOG/GOOGL) has surpassed Wall Street estimates for its second-quarter financial results thanks to growing strength in its cloud computing business unit.
The Silicon valley-based company reported earnings per share of $1.89 U.S. compared to $1.84 U.S. that was the consensus forecast among analysts.
Revenue in the quarter totaled $84.74 billion U.S. versus $84.19 billion U.S. that had been expected on Wall Street. Sales were up 14% from a year earlier.
The results were largely attributed to Alphabet’s Google Cloud segment, which surpassed $10 billion U.S. in quarterly revenues and $1 billion U.S. in operating profit for the first time.
Less than two years ago, Google Cloud was unprofitable and a drag on Alphabet’s financial results. Now, the unit is one of the company’s top performers.
Partially offsetting the strength in Google Cloud was YouTube advertising revenue, which totaled $8.66 billion U.S. That missed analysts’ forecasts that called for $8.93 billion U.S. in ad sales.
However, despite the YouTube miss, Alphabet reported total advertising revenue of $64.62 billion U.S., up 11% from $58.14 billion last year.
The company said it is benefiting from growing strength in online advertising through its Google search engine after inflation and interest rates constrained marketing budgets in 2022 and 2023.
Alphabet’s “Other Bets” unit that includes its self-driving car unit Waymo brought in $365 million U.S., up 28% from $285 million U.S. a year ago.
Management said on the earnings call that they are making a new $5 billion U.S. multi-year investment in Waymo.
Alphabet’s stock fell 3% after its Q2 financial results were released. Year-to-date, the company’s share price is up 32% and trading at $181.79 U.S. per share.
Tech Insider
