Mountain View, California – Alphabet Inc. reported stronger than expected second-quarter financial results on Tuesday, with its adjusted earnings per share and revenue surpassing analyst projections. Google’s stock saw a 2.2% increase in after-hours trading following the announcement.
The company’s success in the quarter was driven by the impressive performance of Google’s Search and Cloud services. Google’s Cloud business achieved a significant milestone by exceeding $10 billion in quarterly revenues for the first time, contributing to an overall revenue increase of 14% compared to the same period last year.
Analysts noted that while the second-quarter results were positive, they were not as broad as the previous quarter. Operating income for Google Cloud surpassed estimates, reaching $1.17 billion.
Alphabet’s CEO, Sundar Pichai, credited the strong quarter to the continued strength in Search and momentum in Cloud services. He emphasized the company’s focus on innovation in AI and infrastructure leadership. Ruth Porat, President and CFO, emphasized the importance of investing in high-growth opportunities and the company’s commitment to optimizing its cost base.
Despite slightly falling short of expectations, Google’s advertising revenue remained a significant part of its business, with YouTube ads revenue coming in below estimates. Overall, Google Services revenue slightly exceeded analyst projections.
Alphabet reported an operating margin of 32%, slightly higher than forecasts. The company’s capital expenditures surpassed expectations, indicating ongoing investments in core and emerging businesses. The workforce also expanded to 179,582 employees.