YouTube ad revenues jumped 13% in the three months to June, adding a nice bit of cream to what was already a solid result for parent company Alphabet.
YouTube’s revenues hit $8.663 billion, contributing to Alphabet’s better-than-expected 14% rise in total revenue to $84.7 billion.
The revenue and earnings figures both came in ahead of Wall Street analysts’ expectations, but YouTube fell slightly short, and the shares eased by 2% in after-hours trading after jumping 2% in an immediate reaction.
The pay-TV offering, YouTube TV, played a part in its parent’s better figures, recently passing 8 million subscribers and attracting new customers thanks to YouTube’s deal with the NFL for Sunday Ticket, which took effect last year.
“Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud,” CEO Sundar Pichai said in the company’s earnings release.
Ruth Porat, President and Chief Investment Officer, noted that its Cloud business for the first time exceeded $10 billion in quarterly revenues and $1 billion in operating profit.
The company reported ad revenue of $64.62 billion — up from $58.14 billion last year — confirming that Google’s advertising business continues to grow after rising inflation and interest rates tightened marketing budgets in 2022 and 2023.
Net profit jumped to $23.6 billion from $18.4 billion in the second quarter of 2023.
The news story from the quarterly report that both fascinated and worried investors after hours was the update from the company about its self-driving vehicle (which will enrage Elon Musk).
Alphabet's “Other Bets” unit, which includes its self-driving car company Waymo, saw revenues of $365 million, up from $285 million a year ago.
Alphabet CFO Ruth Porat announced on the company’s earnings call that the company is committing a new $5 billion multi-year investment in Waymo, which is why there was some selling after the early rise.
Waymo opened its service to all San Francisco users in the quarter. This was Waymo’s second citywide rollout, following its 2020 debut in the Phoenix metropolitan area.
CEO Sundar Pichai said on the company’s earnings call that Waymo is now making 50,000 weekly paid public rides, primarily in San Francisco and Phoenix.
“Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud,” Pichai said in the earnings release.
But self-driving cars worry some investors.
