- The Alphabet announced its revenues in the second quarter by 2020, slightly above Wall Street expectations.
- However, this was not enough to save the company from its first drop in revenues.
- The cloud was one of the brightest places for Google, growing by 43% year-on-year.
- Despite the company’s decline, the company’s inventories remained stable after hours.
- You can find more stories on the Business Insider homepage.
Google’s second-quarter results reveal a slight increase in Wall Street expectations, although this was not enough to save the company from its first drop in revenue since its release.
Parent company Alphabet reported revenue of $ 31.6 billion (minus transportation costs) with earnings per share of $ 10.13. That’s down from the $ 31.7 billion reported in Q2 2019, but a smaller decline than Wall Street predicted as the coronavirus crisis will cause confusion in the advertising industry.
Google saw a gradual decline in revenue in 2009, but this is the first time it has declined year-over-year since the company’s release in 2004.
One of the main culprits was Google’s basic search and advertising revenue, which fell 9.8% year-over-year.
Despite a significant decline, the company’s shares remained stable after the call for profit and rose by less than 1%.
While CFO Ruth Porat said in a statement to the company that growth was “cautiously encouraged” at the end of the quarter, she acknowledged that it was still an uncertain and “difficult global economic environment.”
YouTube advertising revenue also exceeded expectations, bringing in $ 3.81 billion for the quarter, but with 6% year-over-year growth, it also slowed as the pandemic hit advertising spending.
Meanwhile, Cloud, the expected “clear spot” for Google, fell $ 3.01 billion from $ 2.7 billion in the same quarter last year, up 43.19% year-over-year. Although hiring has slowed in all areas, the company’s management said at the company’s urging that “it is still hiring aggressively in priority areas such as the cloud.”
Google’s “other” revenue, such as hardware and purchases on Google Play, was $ 5.12 billion this quarter, up 25.6% year over year.
As for Alphabet’s “other bets” – such as Waymo and Verily – the company reported sales of $ 148 million, a year-on-year decrease of approximately 8%.
It was also announced that the alphabetical table authorized the company to repurchase an additional $ 28 billion from its Class C shares.
Here are the results compared to Bloomberg’s estimates.
Revenue: $ 31.6 billion (minus transportation costs) (estimated at $ 30.5 billion)
EPS (GAAP): $ 10.13 (estimated at $ 8.27)
Net profit: $ 6.96 billion
Google Cloud Revenue: $ 3.01 billion
YouTube Advertising Revenue: $ 3.81 billion
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