Alphabet (GOOG, GOOGL) released its second-quarter earnings after the market close on Tuesday, surpassing estimates on both the top and bottom lines. This strong performance led to a surge in the stock price of up to 6% during after-hours trading.
The Google parent company reported impressive revenue of $74.6 billion, surpassing expectations of $72.75 billion. Additionally, earnings per share came in at $1.44, exceeding the analysts’ projected $1.32.
In a notable move, Alphabet also announced that its CFO, Ruth Porat, would be assuming the newly created role of president and chief investment officer.
The revenue from Google’s ad business performed exceptionally well, reaching $58.14 billion in the quarter, beating the expected $57.5 billion and surpassing the $56.3 billion reported in the same period last year. Furthermore, YouTube’s ad revenue also outperformed estimates, totaling $7.66 billion compared to forecasts of $7.41 billion. In the previous year’s quarter, YouTube ad revenue amounted to $7.34 billion.
Another positive highlight was the profit generated by Google Cloud business, which turned a profit for the first time in the first quarter of this year. The Google Cloud revenues amounted to $8 billion, with a segment income of $395 million, a significant improvement compared to the $590 million loss reported in the same quarter last year.
Overall, Alphabet’s total operating income for the quarter reached $21.8 billion.
Alphabet’s CEO, Sundar Pichai, stated, “Our continued leadership in AI and our excellence in engineering and innovation are driving the next evolution of Search, and improving all our services. With fifteen products each serving half a billion people and six serving over two billion each, we have so many opportunities to deliver on our mission.”
However, the company’s Other Bets segment, which will now be under Ruth Porat’s purview in her new role, reported an operating loss of $813 million in the quarter. Although it is still a loss, it shows an improvement from the $1.34 billion loss seen in the same period last year.
These impressive results in ad and cloud revenue can be attributed to Google’s cost-cutting efforts this year and last, which included a public announcement in January to cut 12,000 employees.