Alphabet, parent company of Google (NASDAQ:GOOGL), reported net income of US$ 18.36 billion in the fiscal second quarter, ended on June 30, a result 14.75% higher than the net profit of US$ 16 billion presented between April and June 2022.
Net earnings per share for the second quarter were $1.44, beating Refinitiv analysts’ expectations for earnings of $1.34 per share. A year earlier, Alphabet’s earnings per share were $1.21.
The company’s revenue totaled US$ 74.6 billion, up 7.06% compared to the result of US$ 69.68 billion obtained in the second quarter of 2022.
The company’s revenue also surpassed the estimates of analysts at Refinitiv, which predicted a result of US$ 72.82 billion.
In the advertising segment, revenue increased 3.3%, to US$ 58.14 billion, compared to the result of US$ 56.28 billion registered a year earlier. On YouTube alone, advertising earnings totaled US$7.66 billion, up 4.36% over the result of US$7.34 billion obtained a year earlier. Street Account analysts were projecting $7.43 billion for YouTube’s ad revenue.
In cloud computing, revenue totaled US$ 8 billion, up 27.6% over the result obtained in the same period last year (US$ 6.27 billion), surpassing the revenue projection of R$ 7.87 billion from StreetAccount analysts.
Market Reaction
Google parent Alphabet’s second-quarter earnings, which beat market analysts’ expectations, were credited to the company’s advances in generative artificial intelligence (AI), as well as revenue from cloud computing and advertising on the YouTube video platform. .
The result, released shortly after the close of the American stock exchange, led to a rise of more than 7% in the company’s shares after the closing of Nasdaq.
On the 13th, Google announced Bard, its generative AI tool in Brazil and in 27 countries of the European Union. OpenAI’s ChatGPT rival tool was announced in May.
“Our continued leadership in AI and our engineering excellence and innovation are driving the next evolution of Search and improving all of our services,” Sundar Pichai, CEO of Alphabet, said in a statement on the balance sheet.
“With fifteen products serving half a billion people, and six serving more than two billion each, we have many opportunities to deliver on our mission,” added Pichai.
The company’s chief financial officer, Ruth Porat, said the results reflect “ongoing resilience” in search, YouTube and cloud computing.
“We continue to invest for growth, prioritizing our efforts to lastingly restructure our cost base across the enterprise and build capacity to deliver long-term sustainable value,” commented Porat.
The layoffs of 12,000 Google employees worldwide, including Brazil, generated $2 billion in severance charges in the first half, Alphabet said.
“In addition, we are taking steps to optimize our global office space,” the company said.