Parent company Google the alphabet Apple reported second-quarter results after the close of trading on Tuesday that were in line with analysts' estimates on revenue and profit, but failed to generate revenue from YouTube ads.
Alphabet shares fell about 2% in after-hours trading.
Here's how the company performed, compared to estimates from analysts surveyed by LSEG:
Earnings: $1.89 per share vs. $1.84 per share expected
Revenue: $84.74 billion vs. $84.19 billion expected
Here are other numbers Wall Street has been watching:
YouTube ad revenue: $8.66 billion vs. $8.93 billion, according to StreetAccount Google Cloud revenue: $10.35 billion vs. $10.20 billion, according to StreetAccount Traffic acquisition costs (TAC): $13.39 billion vs. $13.54 billion, according to StreetAccount
Alphabet's revenue rose 14% year over year, driven by search as well as cloud, which surpassed $10 billion in quarterly revenue and $1 billion in operating profit for the first time.
The company reported $64.62 billion in advertising revenue — up from $58.14 billion a year ago, showing that Google’s advertising business continues to grow, albeit at a slower pace than in the first quarter, after rising inflation and interest rates tightened marketing budgets in 2022 and 2023.
YouTube’s ad revenue, while missing expectations, grew to $8.66 billion from $7.66 billion in the year-ago quarter. Despite being the world’s largest video platform, it faces increasing competition from social video sites like TikTok.
Net income rose to $23.6 billion, or $1.89 per share, compared with $18.4 billion, or $1.44 per share, in the year-ago quarter.
The company’s “Other Bets” unit, which includes self-driving car company Waymo, reported $365 million, up from $285 million a year earlier. Alphabet is committed to a new, multi-year investment of $5 billion in Waymo, Chief Financial Officer Ruth Porritt announced on the company’s earnings call.
During the second quarter, Alphabet saw a number of expansion updates, including Waymo, which opened its service to all San Francisco users. The move was its second citywide rollout, after first launching in the Phoenix metropolitan area in 2020.
Waymo now offers 50,000 paid public rides per week, primarily in San Francisco and Phoenix, CEO Sundar Pichai said on the earnings call.
“Our strong performance this quarter highlights the continued strength in search and momentum in the cloud,” Pichai said in the earnings release. “We are innovating at every layer of AI. Our long-standing leadership in infrastructure and internal research teams positions us well as the technology evolves and as we pursue many future opportunities.”
