Alphabet, the parent company of Google, announced a 14 percent increase in total revenue, reaching $84.74 billion for the second quarter of 2024. This growth was fueled by a rise in digital advertising sales and robust demand for its cloud computing services.
Google’s digital advertising revenue climbed to $64.616 billion from $58.143 billion, with YouTube ad sales rising 13 percent to $8.67 billion. Revenue from Google’s subscriptions, platforms, and devices increased to $9.312 billion from $8.142 billion. Notably, revenue from cloud computing services surged 28.8 percent to $10.35 billion, driven by the strong adoption of generative artificial intelligence technology.
The results highlight the ongoing demand for digital ads, bolstered by events such as the Paris Olympics and various elections, including those in the U.S. A recovery in enterprise spending also contributed to the boost in Alphabet’s software business. Advertising sales, the company’s primary revenue source, rose 11 percent to $64.6 billion, as Alphabet leverages customer data for better-targeted ads.
Net income for the quarter ended June 30 rose 28.6 percent to $23.6 billion. Alphabet reported capital expenditures of $13 billion for the quarter. Ruth Porat, in her final conference call as Alphabet’s CFO, informed investors that capital expenditures for the remaining quarters of 2024 would be at or above $12 billion.
Alphabet’s investments in AI continue to be a focal point, with the company aiming to roll out more AI offerings despite some setbacks. CEO Sundar Pichai indicated that AI products could soon generate revenue, beyond just enhancing efficiency and cutting costs for businesses. However, AI-related missteps, such as the suggestion to put glue on pizza to hold cheese, have prompted Google to refine the technology before further deployment.
Despite regulatory scrutiny, Alphabet has been active in acquisition talks. It was pursuing a $23 billion buyout of cybersecurity firm Wiz, which fell through as Wiz opted to go public. Alphabet also walked away from talks to acquire customer relationship management firm HubSpot, which would have positioned it as a competitor to Salesforce and Oracle.
In a notable shift, Google decided to retain third-party cookies in its Chrome browser, reversing previous plans to phase them out. This move comes after advertisers expressed concerns about the impact on their ability to personalize ads.
Alphabet’s “other bets,” including its self-driving car unit Waymo, saw a 28 percent increase in sales to $365 million. The company plans a multi-year $5 billion investment in Waymo, while competitor Cruise navigates a return to U.S. roads after an accident.
Finally, Alphabet reduced its employee count to 179,582 in Q2 2024 from 181,798 earlier in the year.
