Alphabet’s Q2 financial results beat expectations, show strong growth

Eric Abent - Jul 29, 2016, 2:03pm CDT
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Alphabet’s Q2 financial results beat expectations, show strong growth

Google‘s parent company Alphabet Inc. is soaking it up today, as its financial results for the second quarter are in and they’re looking good in almost every area. The company is showing significant year-over-year growth in most areas, with Alphabet CFO Ruth Porat saying that the company is now reaping the benefits of the investments it has made in the mobile and video spaces.

Revenues for Alphabet came in at $21.5 billion for the quarter, which is a strong 21% increase over the same quarter a year ago and 6% over the previous quarter, signifying that Alphabet not only had a strong quarter, but is off to a great start in its fiscal year. On that revenue, Alphabet had a GAAP operating income of $5.97 billion and a non-GAAP operating income of $7.47 billion, which respectively represent operating margins of 28% and 35%.

When it came to talking about performance in different areas, Alphabet divided everything up into two different groups: “Google” and “not Google.” Google is obviously where Alphabet made the vast majority of its money, as it posted a revenue of $21.32 billion and an operating income of $6.99 billion. Of that revenue, the most significant portions came from Google websites and advertising, which shouldn’t come as much of a surprise to anyone who has watched Google grow into the giant it is today.

Meanwhile, all of Alphabet’s other businesses were lumped into its “Other Bets” segment, which didn’t do all that great throughout the quarter. While revenues came in at $185 million for the quarter, Other Bets posted an operating loss of $859 million. It’s worth noting that many of the businesses in the Other Bets segment are startups and acquisitions, so with many of them, Alphabet is still supporting initiatives like research and development. In other words, it’s not much of a shock that Other Bets has been posting an operating loss.

Particularly of note from the financial report is that aggregate paid clicks were up 29% year-over-year, while paid clicks on Google websites were up an impressive 37% over the same quarter a year ago. On the other side of the coin, aggregate cost-per-click down was 7% and cost-per-click on Google’s sites was down 9% year-over-year. With advertising clearly leading the way for Google’s revenue, we can see why Porat attributed this growth to the company’s investments in mobile and video.

All in all, it was a good quarter for Alphabet, even if that’s only because it was a good quarter for Google. Stocks have been on the climb since the report too, so there’s a lot for Alphabet to love with this particular financial report. You can read the whole thing by checking out the source link below, just be warned that it’s about as hefty as financial reports come.

SOURCE: Alphabet Inc


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