Google parent company Alphabet sprinted past revenue expectations for the second quarter, as the pandemic-induced surge in online shopping powered companies’ digital advertising spend.
The tech giant posted revenue of $61.88bn in the three months to 30 June, up 62 per cent from the same period last year, and miles in front of Wall Street estimates of $56.16bn, according to IBES data from Refinitiv.
The tech behemoth said the figures were driven by strong performance from Google search and Youtube, which account for the majority of its revenue.
Revenue from Google advertising jumped almost 70 per cent to $50.44bn, while that from YouTube jumped 84 per cent to $7bn – edging towards Netflix’s quarterly revenue of $7.34bn.
The company’s cloud business “Google Cloud”, which includes collaboration tools such as Google Docs and Sheets, earned $4.63bn in the period – up from £3.01bn last year.
This helped significantly improve Google Cloud’s operating losses to $591m, from last year’s loss of $1.43bn.
“Our long-term investments in AI and Google Cloud are helping us drive significant improvements in everyone’s digital experience,” said Sundar Pichai, CEO of Google and Alphabet.
“Our strong second quarter revenues of $61.9bn reflect elevated consumer online activity and broad-based strength in advertiser spend,” added Google and Alphabet’s CFO Ruth Porat.
Alphabet’s stock rose almost 4 per cent on the news in after-hours trading.
Alphabet continues to represent an “outstanding opportunity for long-term shareholders” as it inches closer to a $2tn market cap, said Christopher Rossbach, Chief Investment Officer of asset management company J. Stern & Co.
“With a huge pent up demand in consumer spending coming out of the pandemic, the online advertising companies continue to benefit,” he said.
“As such, despite Alphabet shares climbing over 50% already this year, these strong earnings results and positive industry trends more than justify this move of the share price higher after hours.”