Google parent company Alphabet, Inc. announced second quarter revenues of $32.7 billion, an increase of 26 percent YoY. Google stock rose four percent following the earnings call.
Unsurprisingly, Google’s advertising business accounted for a majority of revenue, reaching $28 billion in the second quarter—an increase of 23.9 percent YoY. Mobile search and YouTube were the main drivers of this growth, according to Alphabet, Inc. CEO Ruth Porat, adding that the company’s ad platforms are “firing on all cylinders” as they use machine learning to help marketers succeed.
Paid ad clicks on Google’s own sites and apps rose 58 percent YoY to $23.3 billion, the company reported, only a slight drop from the first quarter’s 59 percent growth. The amount of money Google receives on the average ad click fell 22 percent. Traffic acquisition costs accounted for 23 percent of ad revenue in the second quarter.
Reported second quarter income includes the $5 billion fine imposed by European antitrust regulators last week. Google was accused of forcing device makers to install its search engine and Chrome browser on Android devices. Alphabet plans to appeal the fine but the ruling forced the company to readdress how it handles its smartphone partnerships.
“There’s more work to be done, and it’ll become clearer as we go along,” Google CEO Sundar Pichai said during the second-quarter earnings call. “I’m confident we can find a solution that makes Android available at scale to users everywhere.”
The company’s capital expenditures jumped nearly double YoY to $5.5 billion, attributed to an increase of investments in data centers and facilities, as well as production equipment.
Non-ad businesses within Google earned $4.43 billion, compared to $3.09 billion a year ago. This total includes revenue from the Play Store, hardware such as Google Home speakers and Pixel smartphones and Google’s cloud computing platform.