Alphabet meets earnings expectations but misses on YouTube ad revenue

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Alphabet's revenue was up 14% year over year, driven by search as well as cloud, which surpassed $10 billion in quarterly revenues and $1 billion in operating profit for the first time. Here's how the company did, compared with estimates from analysts polled by LSEG: Google parent company Alphabet reported second-quarter results after the bell Tuesday that were in-line with analyst estimates on revenue and earnings, but missed on YouTube advertising revenue. The company reported ad revenue of $64.62 billion — up from $58.14 billion last year, showing that Google's advertising business continues to grow, though at a slower pace than in the first quarter, after rising inflation and interest rates tightened marketing budgets in 2022 and 2023. While YouTube ad revenue missed estimates, it still grew to $8.66 billion compared to $7.66 billion in the year-ago quarter. Though it's the largest video platform in the world, it faces increased competition from social video sites like TikTok. Net income increased to $23.6 billion, or $1.89 per share, compared to $18.4 billion, or $1.44 per share, in the year-ago quarter. The company's "Other Bets" unit, which includes its self-driving car company Waymo, brought in $365 million, up from $285 million a year ago. Finance chief Ruth Porat announced on the company's earnings call that Alphabet is committing a new $5 billion multiyear investment in Waymo. During the second quarter, Alphabet saw a number of expansion updates, including for Waymo, which opened its service to all San Francisco users. The move was its second citywide rollout, following a 2020 debut in the Phoenix metropolitan area. CEO Sundar Pichai said on the earnings call that Waymo is now making 50,000 weekly paid public rides, primarily in San Francisco and Phoenix. "Our strong performance this quarter highlights ongoing strength in Search and momentum in Cloud," Pichai said in the earnings release. "We are innovating at every layer of the AI stack. Our longstanding infrastructure leadership and in-house research teams position us well as technology evolves and as we pursue the many opportunities ahead."