Illustration: Lazaro Gamio/Axios
Alphabet revenue dropped 2% from last year, the company announced in second-quarter earnings Thursday, beating Wall Street expectations a day after Google CEO Sundar Pichai appeared before the House Judiciary antitrust subcommittee to face allegations of anticompetitive behavior.
Yes, but: Despite beating expectations on revenue, the company still reported its first-ever decline, thanks to a reduction in the advertising growth rate thanks to the coronavirus pandemic. Stock rose slightly in after-hours trading.
Why it matters: The company may have fared better than investors were expecting, but the company remains almost entirely dependent on ad revenue and experienced a difficult quarter.
What they're saying: Ruth Porat, chief financial officer of Alphabet and Google, said the company saw gradual improvement in its ad businesses and strong growth in Google Cloud and other revenues.
- “We continue to navigate through a difficult global economic environment," she said.
- “We’re working to help people, businesses and communities in these uncertain times,” said Sundar Pichai, CEO of Google and Alphabet. “As people increasingly turn to online services, our platforms — from Cloud to Google Play to YouTube — are helping our partners provide important services and support their businesses.”
By the numbers, via CNBC:
- Earnings: $10.3 versus $8.21 per share, based on Refinitiv consensus estimates
- Revenue: $38.3 billion, versus $37.37 billion expected by Refinitiv
- YouTube advertising revenue: $3.81 billion versus $3.78 billion expected, according to StreetAccount estimates
- Google Cloud revenue: $3.01 versus $3.06 billion expected, as per StreetAccount
- Traffic acquisition costs (TAC): $6.69 billion versus $6.67 billion expected, as per StreetAccount