Google parent co Alphabet's Q2 consolidated revenue up 13% to $69.7 bn
While Google Search and other advertising revenues were up 14%, YouTube ad revenues increased by 5%
Google's parent company Alphabet has posted a 13% growth in consolidated revenue at $69.7 billion for the second quarter. The company's total cost of revenue was up 15% at $30.1 billion primarily driven by other costs of revenue, which was $17.9 billion, up 17%.
Operating expenses were up 24% to $20.1 billion due to an increase in R&D expenses, and growth in sales and marketing expenses. Operating income was flat at $19.5 billion while net income was down 14% to $16 billion.
The company delivered a free cash flow of $12.6 billion in the quarter and $65 billion for the trailing 12 months. "We ended the quarter with $125 billion in cash and marketable securities," Alphabet CFO Ruth Porat said during the earnings call.
Total Google Services revenues were up 10% to $62.8 billion. Google Search and other advertising revenues were up 14% at $40.7 billion driven by both travel and retail. YouTube advertising revenues increased by 5% to $7.3 billion. Network advertising revenues were up 9% at $8.3 billion driven by AdSense. Other revenues were down 1% to $6.6 billion.
"The modest year-on-year growth rate primarily reflects lapping the uniquely strong performance in the second quarter of 2021. The quarter-on-quarter deceleration in both YouTube and network advertising revenues primarily reflects pullbacks in spend by some advertisers," Porat said.
The Alphabet CFO also noted that there was a slowdown in buyer spending due to multiple factors including lower engagement levels compared with earlier stages of the pandemic.
In terms of costs within Google Services, Porat stated that Traffic Acquisition Cost (TAC) was up 12% to $12.2 billion. Google Services' operating income was $22.8 billion, up 2%, and the operating margin was 36%.
Google Cloud Platform (GCP) segment revenues were $6.3 billion for the second quarter, up 36%. Google Cloud had an operating loss of $858 million. "GCP's revenue growth was again greater than Cloud's, reflecting significant growth in both infrastructure and platform services. Strong revenue growth in Google Workspace was driven by solid growth in both seats and average revenue per seat," Porat added.
