Alphabet Inc, the parent company of Google, announced record quarterly revenue and earnings on Tuesday, owing to an increase in advertising expenditure as more people bought online.
Alphabet the parent company of Google, which is the world’s largest source of search and video advertisements, saw its stock rise 3.3 percent in extended trading following the results, which was easily above analyst expectations. Facebook’s stock gained 1.3 percent on Wednesday, as the company competes with Google in digital ad sales and publishes its own statistics.
Overall, the top US IT giants had a great day, with Apple and Microsoft both reporting record earnings.
Consumers have been spending more time online as a result of the coronavirus epidemic, and businesses have been working hard to reach them there, whether they’re searching for items on Google or watching movies on YouTube. The fledgling US economic recovery that has followed the vaccination rollout and the relaxation of limitations is also beneficial, since consumers have more mobility and options.
“Alphabet has benefited from the general return of ad spend to the market and especially the balance of that return, which is more focused on digital channels than pre-pandemic,” said Tom Johnson, chief digital officer at WPP Mindshare.
Google advertising income increased over 70% to $50.44 billion in the second quarter ended June 30, according to Alphabet.
During a conference call with investors, Philipp Schindler, Google’s chief business officer, claimed that retail brands were the greatest contributor to the ads business’ development. He went on to say that the tourism, financial services, and media and entertainment industries were all doing well.
Ad income for YouTube, the company’s streaming video network, increased 83.7 percent year over year to $7 billion, virtually matching Netflix’s quarterly revenue.
According to Nicole Perrin, eMarketer lead analyst at Insider Intelligence, the results “outperformed our estimates across all three lines of Google’s ad business: search, Google Network, and YouTube.” “During the quarter, YouTube was the fastest-growing sector, indicating that video advertising remains strong for both direct response and brand purposes.”
According to IBES statistics, Alphabet’s total revenue increased 61.6 percent to $61.88 billion, considerably above Wall Street forecasts of $56.16 billion.
Quarterly profit was $18.5 billion, or $27.26 per share, compared to $19.34 per share expected.
Google Cloud reduced its operational loss to $591 million in the third quarter, trailing Amazon.com Inc and Microsoft Corp in market share.
The good results come as Alphabet faces four antitrust cases from federal and state authorities in the United States, which threaten to compel substantial changes throughout the company’s operations, including advertising and smart home devices.
Most recently, 37 state and district attorneys general in the United States claimed earlier this month that Google “illegally” maintained a monopoly on its Android app store. The cases are anticipated to go on for years.