Alphabet (GOOG, GOOGL) reported its fiscal second-quarter earnings, beating analysts' estimates on both the top and bottom lines.
The company's cloud business showed significant growth, topping the $1 billion mark in operating profit for the first time.
Earnings per Share (EPS): $1.89 (Analysts expected $1.85)
Revenue: $84.7 billion (Analysts expected $84.3 billion)
Year-over-Year Increase: 31% in EPS (from $1.44) and 14% in revenue (from $74.6 billion)
Advertising Revenue: $64.6 billion (Analysts expected $64.5 billion, up from $58.1 billion last year)
YouTube Ad Revenue: $8.66 billion (Analysts expected $8.95 billion)
Cloud Business Performance:
Revenue: $10.35 billion (Analysts expected $10.1 billion)
Operating Income: $1.17 billion (Analysts expected $982.2 million, up from $8 billion in revenue and $395 million in operating income in Q2 2023)
Alphabet shares were flat immediately following the announcement. The company's stock is up 30% year-to-date, compared to Microsoft’s 18% and Amazon’s 22%.
AI Investments:
Spending: $2.2 billion in Q2 2024 (up from $1.1 billion in Q2 2023)
Focus Areas: DeepMind and Google Research
Challenges: Monetization of AI is still uncertain, with potential significant revenue impacts anticipated around 2025-26.
Despite efforts in AI, Google faced challenges with its generative AI feature, AI Overview, which had inaccuracies. The company reduced some AI features in response to user feedback.
Cost Management:
Employee Count: 179,582 (down from 181,798 in the same period last year)
The company's cloud business showed significant growth, topping the $1 billion mark in operating profit for the first time.
Earnings per Share (EPS): $1.89 (Analysts expected $1.85)
Revenue: $84.7 billion (Analysts expected $84.3 billion)
Year-over-Year Increase: 31% in EPS (from $1.44) and 14% in revenue (from $74.6 billion)
Advertising Revenue: $64.6 billion (Analysts expected $64.5 billion, up from $58.1 billion last year)
YouTube Ad Revenue: $8.66 billion (Analysts expected $8.95 billion)
Cloud Business Performance:
Revenue: $10.35 billion (Analysts expected $10.1 billion)
Operating Income: $1.17 billion (Analysts expected $982.2 million, up from $8 billion in revenue and $395 million in operating income in Q2 2023)
Alphabet shares were flat immediately following the announcement. The company's stock is up 30% year-to-date, compared to Microsoft’s 18% and Amazon’s 22%.
AI Investments:
Spending: $2.2 billion in Q2 2024 (up from $1.1 billion in Q2 2023)
Focus Areas: DeepMind and Google Research
Challenges: Monetization of AI is still uncertain, with potential significant revenue impacts anticipated around 2025-26.
Despite efforts in AI, Google faced challenges with its generative AI feature, AI Overview, which had inaccuracies. The company reduced some AI features in response to user feedback.
Cost Management:
Employee Count: 179,582 (down from 181,798 in the same period last year)