As part of its quarterly earnings announcement, Alphabet announced explosive growth at Google, which easily surpassed expectations.
Alphabet posted net income of $9.95 billion on revenues of $38.9 billion for the quarter ending June 30. That’s 19 percent gain in revenues year-over-year, which is impressive enough. But Alphabet’s income more than tripled YOY.
As is always the case, Google represented the vast majority of those sums: Alphabet reported that Google posted an operating income of $10.4 billion (up almost 16 percent YOY) on revenues of $38.8 billion (up 19.3 percent YOY).
“Our effort to build a more helpful Google for everyone brings countless opportunities to help users, partners, and enterprise customers every day,” Google CEO Sundar Pichai said in a prepared statement. “From improvements in core information products such as Search, Maps, and the Google Assistant, to new breakthroughs in AI and our growing Cloud and Hardware offerings, I’m incredibly excited by the momentum across Google’s businesses and the innovation that is fueling our growth.”
Google’s revenues from advertising were $32.6 billion, or 81 percent of its total revenues, and a gain of 16 percent YOY. A year ago, advertising was 84 percent of Google’s revenues. In the previous quarter, Google’s ad sales were soft, so the positive results this time around quelled investor fears that Google’s core business was slowing down.
Google highlighted its Google Cloud business, noting that it reached an annual run rate of $8 billion, double the number from a year ago. This suggests that Google Cloud generated revenues of about $2 billion in the quarter, a far cry from the $8.4 billion that Amazon AWS generated in the same time period; indeed, AWS posted a profit of $2.1 billion in the quarter. Google is a distant number three after AWS and Microsoft Azure in this market. Microsoft’s commercial cloud business posted revenues of $11 billion in this past quarter, but Azure is only part of that business unit.
Google didn’t disclose anything about regulatory concerns as part of its financial results. But the firm separately stated that it was “engaging” with the U.S. Department of Justice in the wake of news that the regulatory agency was investigating the firm and other Big Tech companies for antitrust violations. “We understand there will be scrutiny,” Mr. Pichai said.