Key Takeaways

  • Google Cloud revenue surpassed analyst estimates.
  • Google Cloud is one of Alphabet's primary business segments. It provides developers with a cloud platform for building, testing, and deploying applications.
  • Google advertising revenue rose 68.9% compared to the year-ago quarter.
Alphabet (Google) Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Beat $27.26 $18.92
Revenue Beat $61.9B $56.1B
Google Cloud Revenue Beat $4.6B $4.4B

Source: Predictions based on analysts' consensus from Visible Alpha

Alphabet (GOOGL) Financial Results: Analysis

Alphabet Inc. (GOOGL), parent company of Google, reported Q2 FY 2021 earnings that smashed analyst expectations. Earnings per share (EPS) came in well above what analysts were forecasting, rising 169.1% year over year (YOY). Revenue also beat analyst estimates by a wide margin, up 61.6% compared to the year-ago quarter. Google Cloud revenue came in at $4.6 billion, exceeding expectations. The company's shares were up more than 3% in extended trading. Over the past year, Alphabet's shares have provided a total return of 72.4%, well above the S&P 500's total return of 35.9%.

GOOGL Google Cloud Revenue

Google Cloud revenue grew 53.9%, its fastest pace since Q3 FY 2019. Google Cloud is one of the tech giant's primary business segments, the other being Google Services. The cloud segment provides developers with a highly scalable and reliable platform for building, testing, and deploying applications. It also offers workspace collaboration tools, including apps like Gmail, Docs, Drive, Calendar, Meet, and more. As of the end of the first quarter of 2021, Google Cloud had an estimated 9% of the $150 billion global cloud market, ranking it third behind Microsoft Corporation's (MSFT) Azure and top-ranked Amazon.com, Inc.'s (AMZN) Amazon Web Services.

GOOGL Ad Revenue

Google's total ad revenue rose 68.9% compared to the year-ago quarter, rising to $50.4 billion. Google's ad revenue took a hit amid the onset of the COVID-19 pandemic last year. The company's advertising business includes ad revenue from YouTube, Google Network, and Google's search engine, which controls approximately 90% of the global search engine market. YouTube revenue was up 83.7% YOY to $7.0 billion in the second quarter.

Alphabet's next earnings report (for Q3 FY 2021) is estimated to be released on Oct. 27, 2021.