Strong growth in Google's cloud business helped buoy an otherwise challenging quarter for Alphabet, as ad revenues across Search and YouTube struggle to rebound to pre-pandemic levels.
For Q2 2020, Google Cloud -- which includes Google Cloud Platform (GCP) and G Suite -- brought in $3.007 billion, up 43% from $2.1 billion a year prior and $2.77 billion the previous quarter. The growth was led by GCP infrastructure offerings and the data and analytics platform.
"GCP maintained the strong level of revenue growth it delivered in the first quarter, and its revenue growth was again meaningfully above cloud overall," said Google CFO Ruth Porat. "Overall, the lower Google Cloud revenue growth in the second quarter relative to the first quarter reflects the fact that G Suite lapped a price increase that was introduced in April last year. G suite maintained healthy growth in average revenue per seat as well as in seat growth which does not include customers who took advantage of our free trials as they shifted their employees to work-from-home."
While Advertising continues to generate the most revenue for Google, the number is down significantly compared to the same period in 2019. In Q2, Google ad revenues came to $29.867 billion, compared to $32.494 billion in Q2 2019.
The same goes for Google Search and other ad revenue (excluding YouTube), which brought in $21.32 billion in Q2, down from $23.642 billion during the year-ago period. Revenue for YouTube ads was down quarter-over-quarter to $3.812 billion but up from $3.603 billion a year ago.
As for Alphabet's overall Q2 results, diluted earnings per share came to $10.13 on revenue of $38.29 billion, down 2% year-over-year. On average, Wall Street was looking for Q2 earnings of $8.34 per share with $37.36 billion in revenue.
In Alphabet's moonshot "Other bets" category, revenue came to $148 million while the operating loss climbed to $1.12 billion. Google announced last quarter that it would down hiring for the rest of 2020. The headcount at the end of the second quarter was 127,498.