- The Alphabet has announced second-quarter earnings for 2020, slightly beating Wall Street expectations.
- But it was not enough to save the company from its first drop in revenue.
- The cloud was one of the brightest spots for Google, seeing a 43% year-on-year increase.
- Despite the decline, the company stock remained stable after hours.
- Visit the Business Insider homepage for more stories.
Google ‘s second – quarter results are in, revealing a slight blow to Wall Street expectations, though it was not enough to save the company from its first revenue drop since going public.
Parent Company Alphabet reported revenue of $ 31.6 billion (minus traffic acquisition costs) with revenue per share of $ 10.13. This is down from the $ 31.7 billion reported in Q2 2019, but a smaller decline than Wall Street had predicted as the coronavirus crisis devastated the advertising industry. One of the main culprits was Google’s core search and ad revenue, which was down 9.8% year-on-year.
Despite the sharp decline, the company’s stock remained stable after its earnings call, rising less than 1%.
While chief financial officer Ruth Porat said in calling the company’s profits that it was “cautiously encouraged” by growth near the end of the quarter, she acknowledged it was still an uncertain and “difficult global economic” environment.
YouTube ad revenue also beat expectations, bringing in $ 3.81 billion for the quarter, but with only 6% year-on-year growth it also marked a slowdown as advertising spending was hit by the pandemic.
Meanwhile Cloud, a “bright spot” expected for Google, reached $ 3.01 billion – up from $ 2.7 billion for the same quarter last year and up 43.19% year-on-year. As hiring slowed on board, executives said in the company call that it was still “aggressively hiring in priority areas like the Cloud”.
Google’s “other” revenue, covering things like shopping malls and Google Play, was $ 5.12 billion for the quarter – up 25.6% year-on-year.
As for the “other bets” of the Alphabet – such as Waymo and Verily – the company reported revenue of $ 148 million, year on year by about 8%.
It was also reported that Alphabet board has authorized the company to repurchase up to $ 28 billion of its Class C shares.
Here are the results compared to Bloomberg estimates.
Revenue: $ 31.6 billion (minus traffic acquisition costs) (estimated at $ 30.5 billion)
EPS (GAAP): $ 10.13 (estimated $ 8.27)
Net income: $ 6.96 billion
Revenue from Google Cloud: $ 3.01 billion
YouTube ad revenue: $ 3.81 billion
Get the latest Google stock price here.