Summary
- Alphabet’s strong growth, driven by AI and Search, continues in Q2, with $84.74 billion in revenue.
- Google’s ad business remains robust, generating $64.6 billion in Q2, including $8.6 billion from YouTube ads.
- The decision to keep third-party cookies in Chrome to maintain the ad revenue stream solidifies Google’s financial strength.
Google’s parent company, Alphabet, continues to demonstrate its financial prowess. In our last report of Alphabet’s earnings in Q1 2024, the company had a remarkable $80.54 billion in revenue with a net income of $23.66 billion. The just-released earnings report for the second quarter reaffirms Alphabet’s strong growth trajectory, instilling optimism and confidence in the company’s future among investors and tech industry enthusiasts.
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Over the course of the last few months, Google has been working towards its biggest acquisition ever, engaging in high-level talks that would have seen it add cloud security firm Wiz to the fold for the hefty sum of $23 billion. According to a report from CNBC today, that deal is now dead, with Wiz walking away from the table and opting to pursue an IPO instead. Google Cloud had hoped to bolster its offerings in a market segment where competition has grown stiff in recent years, but the company now finds itself back at the drawing board. For the full story, copy and paste the following link in your browser’s URL bar: https://www.cnbc.com/2024/07/23/google-wiz-deal-dead.html
According to Alphabet’s Q2 2024 earnings report (PDF warning), the company generated $84.74 billion in total revenue, a 14% growth from last year. As expected, Google’s Search business and AI are the main reasons behind this prolific earnings report for the quarter, which ended on June 30.
Google Search brought in $48.5 billion in the second quarter of the year, while Google Cloud generated up to $10.35 billion in revenue and achieved $1 billion in operating profit. During the earnings call, Google CEO Sundar Pichai announced that the company’s AI solutions for Cloud customers have “already generated billions in revenues and are being used by more than 2 million developers” (via The Verge).
Google’s net income is $23.6 billion, a significant increase from $18.3 billion in 2023. In April, Google’s market cap could also hit $2 trillion, a milestone that further reinforces the tech giant’s position in the market.
Alphabet’s strategic focus on AI and Search has paid off
Advertising, a cornerstone of Google’s revenue, continues to perform strongly. In the first quarter of the year, Google generated $61.66 billion from selling ads, with YouTube ads alone bringing in $8.09 billion in revenue.
In the second quarter of 2024, Google’s ads business generated $64.6 billion in revenue. This quarter, Google could sell $8.6 billion of ads on YouTube. Google subscriptions, platforms, and devices could also bring in $9.3 billion, driving up to $73.9 billion to Google’s bank account in total.
Earlier this week, Google confirmed it had abandoned its plans to phase out third-party cookies in Google Chrome. The move comes after advertisers said losing access to third-party cookies will limit their ability to tailor ads to users. This decision is expected to maintain the current revenue streams from advertising, ensuring the company’s financial strength and growth trajectory.
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