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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

Go deeper

Uber CEO talks exporting Prop 22 after mixed earnings report

Illustration: Aïda Amer/Axios

Uber is looking to export to other states California's newly voter-approved policy that will let the company continue to treat its drivers as contractors and not employees, CEO Dara Khosrowshahi said on an analyst call after the company posted mixed third-quarter results Thursday.

The big picture: Uber and Lyft helped lead a $200 million campaign to convince Californians to vote for Proposition 22, which they did overwhelmingly Tuesday. Uber now wants to "have dialog with governments and other states" on enacting similar arrangements, Khosrowshahi said.

26 mins ago - Sports

Simone Biles is still a winner

Photo: Laurence Griffiths/Getty Images

Simone Biles' leadership on the mat has never been questioned. After her shocking withdrawal from Tuesday's team final, she proved just as capable a leader off of it.

What happened: During the first rotation, Biles performed an uncharacteristically bad vault, appearing to lose herself in midair.

The "remarkable" business investment recovery

Data: U.S. Census Bureau; Chart: Axios Visuals

Businesses are investing in themselves.

Why it matters: Core capital goods orders, or those for durable goods that aren’t aircraft or defense-related, are a proxy for business investment.