Alphabet crushes Q2 expectations with "elevated consumer online activity"
Alphabet's revenues and profits soared in Q2 2021, handily beating market estimates.
The growth reflected "elevated consumer online activity and broad-based strength in advertiser spend," Ruth Porat, CFO of Google and its parent company Alphabet, said on a conference call Tuesday.
Alphabet reported net income of $18.53 billion and diluted earnings per share of $27.26. Total revenues came to $61.88 billion, up 62 percent.
Wall Street was looking for earnings of $19.14 per share with $56.03 billion in revenue.
"In Q2, there was a rising tide of online activity in many parts of the world, and we're proud that our services helped so many consumers and businesses," Alphabet and Google CEO Sundar Pichai said in a statement. "Our long-term investments in AI and Google Cloud are helping us drive significant improvements in everyone's digital experience."
As usual, Google Services revenues attributed most of Q2 sales, with $57.1 billion in revenue, and advertising continues to generate the most revenue for Google. In Q2, Google ad revenues came to $50.44 billion, compared to $29.87 billion in Q2 2020.
Google Search and other ad revenue (except for Youtube ad sales) increased year-over-year to $35.85 billion in Q2. Revenue for YouTube ads rose from $3.81 billion in Q2 2020 to $7 billion in Q2 2021.
In Alphabet's moonshot "Other bets" category, revenue came to $192 million while its operating loss reached $1.4 billion.
Google's growing cloud business
Google Cloud brought in $4.63 billion in sales for the second quarter of 2021, Google's parent company Alphabet reported Tuesday. That's up 54 percent from $3 billion the year prior.
The cloud business posted an operating loss of $591 million, compared with a loss of $1.43 billion a year prior.
Google recently began disclosing Google Cloud's operating losses, giving a better picture of how much Google's ad business continues to subsidize its cloud expansion.
Google Cloud Platform (GCP)'s revenue growth was once again above cloud overall, Porat said on Tuesday's conference call, reflecting significant growth in both infrastructure and platform services. Workspace revenue, she said, was driven by growth in both seats and average revenue per seat.
"We still are in the early stages of the [cloud] business, and we do intend to continue to invest aggressively," Porat said, "including expanding our go-to-market organization, channel expansion, product offerings and our compute capacity."