Google Earnings Top Estimates With $24 Billion Quarterly Profit

TOPLINE

Google parent Alphabet came in above Wall Street’s lofty expectations in its second-quarter earnings report released Tuesday afternoon, as the internet behemoth continues to rake in tens of billions of advertising dollars.

KEY FACTS

Alphabet’s $84.7 billion of second-quarter revenue was slightly above average analyst estimates of $84.2 billion, according to FactSet, a 14% year-over-year increase.

The company tallied earnings per share of $1.89, also topping forecasts of $1.84, while its $23.6 billion net income was just shy of Q1’s prior record of $23.7 billion.

Shares of the Silicon Valley kingpin rose slightly immediately after the earnings announcement.

KEY BACKGROUND

Alphabet’s report is part of a flurry of second-quarter earnings, with 25% of S&P 500 companies scheduled to report fiscal results this week, according to Bank of America. A digital age conglomerate whose products include leading search engine Google, paid cable alternative YouTube TV, Microsoft Office 365 competitor Google Workspace and generative artificial intelligence chatbot ChatGPT’s rival Gemini, Alphabet is an advertising business at its core. About three-fourths of its Q2 revenues were from ads, including $49 billion from its search business and $9 billion on YouTube ads. Like it has been for many other big tech stocks during the AI boom, it’s been a very nice stretch for Alphabet stock, returning about 50% over the last year and over 100% from its late 2022 low. Alphabet is the fourth-most-valuable company in the world by market value, worth nearly $2.3 trillion as of Tuesday’s stock market closure, trailing only fellow West Coast tech companies Apple, Microsoft and AI golden child Nvidia in market capitalization. Google paid its first ever quarterly cash dividend of $0.20 per share last month.

BIG NUMBER

31%. That’s how much higher Alphabet’s second-quarter adjusted earnings per share was than the same period last year. The company is expected to contribute to the fourth-greatest share of profit growth to the S&P, according to FactSet, trailing only Nvidia, Google Cloud competitor Amazon and advertising foe Meta, the parent company of Facebook and Instagram.

TANGENT

Alphabet’s potential largest-ever acquisition, a $23 billion purchase of Israeli cybersecurity firm Wiz, fell through late Monday after the sides were reportedly in advanced talks for a deal last week.