A 13% year-over-year increase in revenue from YouTube ads during the second quarter of 2024 and a 13.8% annual increase in revenue from Google Search ads helped lead Alphabet subsidiary Google to report an 11% annual gain in advertising for Q2 of 2024. Google Search ad revenue rose from $42.63 billion to $48.51 billion year-over-year and YouTube ad revenue amounted to $8.66 billion up from the $7.67 billion that was generated during the same quarter last year.
Google said that for the three months ended in June 2024, total Google advertising revenue came to $64.62 billion compared to the $58.14 billion in advertising revenue that came into Google’s coffers during the second quarter of 2023. Traffic acquisition costs rose 6.8% to $13.39 billion which was well worth it to Google thanks to the aforementioned 11% annual hike in Q2 advertising revenue.
“Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud. We are innovating at every layer of the AI stack. Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead.”-Sundar Pichai, CEO of Alphabet, Google
The business unit which includes Pixel devices, Google subscriptions, platforms, and devices, saw top-line growth of 14.4% to $9.31 billion from $8.14 billion. That could indicate growing demand for Pixel phones, tablets, smartwatches, and earbuds. Google’s Cloud business was very strong with the top-line rising 28.8% to $10.35 billion compared to the $8.03 billion that this business generated during the same quarter last year. This was the first time that Google’s Cloud business topped $10 billion in revenue and $1 billion in operating profit during a single quarter.
Alphabet’s total revenue of $84.74 billion during the second quarter was up from the $74.60 billion reported during the 2023 second quarter. This was a 13.6% increase and helped Alphabet report a 28.6% gain in net income to $23.62 billion for the second quarter of 2024. During the same quarter last year, Alphabet had net income of $18.37 billion. Diluted earnings per share, which assumes the conversion to equity of all convertible debt, was reported by Alphabet to be $1.89 for Q2 of 2024, up 31.3% from the $1.44 reported for the same quarter in 2023.
“We delivered revenues of $85 billion, up 14% year-on-year driven by Search as well as Cloud, which for the first time exceeded $10 billion in quarterly revenues and $1 billion in operating profit. As we invest to support our highest growth opportunities, we remain committed to creating investment capacity with our ongoing work to re-engineer our cost base durably”-Ruth Porat, Alphabet president, chief investment officer
The report did not sit well with Alphabet investors; the shares rose 12 cents during the regular trading session to $181.79 but plunged $3.96 or 2.18% to $177.83 in after-hours trading after the earnings were released. While Alphabet’s earnings and revenue were higher than expected, YouTube’s performance disappointed investors, explaining the subsequent stock sell-off during the extra trading session.
