Google parent company Alphabet reports first revenue decline in history; search revenue dropped more than $2 billion from a year ago
For the first time its history, Google parent company Alphabet sees its revenue decline from a year ago due to the impact of coronavirus pandemic. However, the company managed to beat Wall Street’s revenue expectations. Even with the declining revenue, Alphabet added approximately 4,000 new employees during the second quarter.
In the last quarter, Alphabet raked in $38.3 billion, versus the $37.4 billion expected. However, the quarterly revenue represents a 2 percent decline from the second quarter of 2019. Alphabet profit also dropped from $9.9 billion a year ago, to $6.9 billion. Revenue for Search was $21.3 billion, down from $23.6 billion.
“We continue to navigate through a difficult global environment,” CFO Ruth Porat said in a statement announcing the earnings.
It’s not all bad news for the tech giant. The report has one silver lining. YouTube, where advertising revenue rose from $3.6 billion last year, to $3.81 billion this year. Google’s Cloud division saw rising revenue as well.
Below is how the company performed against Refinitiv consensus estimates:
- EPS: $10.13 (non-GAAP), vs. $8.21 estimated.
- Revenue: $38.30 billion vs. $37.37 billion estimated.
- YouTube advertising revenue: $3.81 billion vs. $3.78 billion, according to StreetAccount estimates
- Google Cloud revenue: $3.01 billion vs. $3.06 billion, as per StreetAccount
- Traffic acquisition costs (TAC): $6.69 billion vs. $6.67 billion, as per StreetAccount