That sound you’re hearing? That’s a collective sigh of relief from investors in Google’s parent company Alphabet, which managed to bounce back with its second quarter earnings results Thursday. Alphabet missed analyst estimates by as much as $0.42 when it released its Q1 earnings earlier this year. This time around, it did a lot better.
Here are the numbers in a nutshell: Alphabet generated $21.5 billion in revenue during its most recent quarter, compared to $17.7 billion during the same quarter a year ago. The company’s adjusted net income amounted to $4.9 billion, compared to $3.9 billion during the same quarter last year. This equals $8.42 in earnings per share, compared to $6.99 a year ago. Analysts had expected revenue of 16.9 billion, and earnings per share of $8.04.
Alphabet CFO Ruth Porat called the results “terrific” in the company’s earnings release, and the stock market agreed, sending Alphabet’s stock up close to five percent in after-hours trading following the earnings release.
Google CEO Sundar Pichai credited mobile with much of the company’s growth, and said that the move to mobile has also been benefiting YouTube, and advertising dollars the company is generating with the video service. “Video is the killer format on mobile,” Pichai said.
Asked about live streaming, Pichai said that Google was “absolutely committed to the space.” He added that live stream viewing time had increased by 3x since the beginning of the year.
Google officially restructured under the Alphabet corporate umbrella a year ago. Part of the rationale for that move was to give investors a little more insights into what Google is spending its money on; and in particular, how much of that money is being spent on far-out experimental stuff like life extension, robots and self-driving cars.
Alphabet essentially consists of two main parts: Good old Google, which includes the search and advertising business as well as Android, Chrome, Maps and YouTube — the things that make you think: Sure, that’s Google.
And then there is a segment called “other bets,” which includes Calico Life Sciences, the company’s Fiber internet access business, Nest and moonshots like self-driving cars — the things that long made investors wonder: Wait, what’s Google doing now?
Some of these other bets don’t generate any revenue at all yet. Nest and Fiber do make some money, but also come with significant costs. Alphabet grew its revenue from this other bets segment 150 percent year-over-year, to the tune of $185 million.
However, putting fiber-optic cables in the ground in multiple cities, marketing smart thermostats and trying to cheat death also isn’t cheap: Alphabet lost $859 million on other bets during the quarter, up from $660 million, which means losses from other bets grew 30 percent.
But Alphabet is also doing some of its hardware under the Google umbrella, and quite successfully so: Pichai revealed Thursday that the company now has sold over 30 million Chromecast devices. In May, Pichai told attendees of the company’s Google I/O developer conference that Chromecast had sold more than 25 million times.