When a large company reports its profits, this is not just an event, but a certain signal for the entire market. This is the only way to understand where the industry is heading. Today Alphabet, which includes Google, YouTube and others, reported on its financial activities. Of course, such a company cannot operate at a loss. She and her services have shown a profit that amounts to billions of dollars. How much specifically did each of them earn? Is it a lot or a little? What to do with this information? What to expect from Google and YouTube? Let's understand this and understand what is behind the dry numbers in the report.
YouTube is making good money.
Google financial statements
Large companies publish their financial statements so that shareholders can familiarize themselves with it. This is done every quarter, and the report itself contains information about the main activity. Profit, revenue, and so on. A report is a very large piece that can answer many questions, but literally a couple of positions often bring the most clarity. In order not to overload the article and your Friday evening with unnecessary numbers, I will try to explain everything as briefly as possible.
Alphabet, which includes Google and other companies, this time reported its second quarter, which was very mixed in terms of the market. The pandemic has confused many cards and the fact that users were sitting at home and consuming content does not mean anything yet. In addition, there were advertisers who were in no hurry to shell out, and therefore it is impossible to talk about a super-successful quarter.
Google makes good money, but what does that mean?
How much Alphabet, Google and YouTube earned
For the period April-June 2020, the revenue of all Alphabet amounted to $ 38.94 billion. It seems like a lot, but in the previous quarter the figure was $ 41.16 billion. This difference cannot be called insignificant. We are only talking about revenue. The company's profit is much more modest and amounted to $ 6.38 billion in the second quarter. Before that, there were 6.84 billion.
Google can make money, but it can't be otherwise.
We work 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 the cloud to Google Play to YouTube – help our partners deliver critical services and support their businesses.
In the second quarter, our total revenue was driven by a gradual improvement in our advertising business and significant growth in Google Cloud, as well as revenue from other products, ”said Ruth Porat, Chief Financial Officer of Alphabet and Google.“ We continue to overcome challenging global economic conditions.
Google's ad revenues were down about 10 percent, but the decline was more or less offset by other Google services that did slightly better. In more detail, it should be noted that YouTube ad revenue was $ 3.81 billion, while cloud storage brought in $ 3 billion in the second quarter.
Other Google income
There is also a separate column called 'Google Other Income'. It includes revenues from hardware, Play Store and non-advertising YouTube. That revenue was $ 5.12 billion in the second quarter versus $ 4.08 billion in the same quarter last year.
I want to note that our hardware team continues to achieve good results, ”Pichai said.“ And I am delighted with the new devices that we have this fall.
From this statement, we can conclude that the company is preparing something for us, and among this will most likely be the Google Pixel 5. And Sundar Pichai is happy with it. Of course, this cannot be said by chance in an official statement, so in this way he hinted to us about the imminent release of a cool smartphone. Although, most likely, it will be steep not in terms of absolute computing power, but in terms of a combination of factors – price and performance.
When Sundar Pichai is happy, all Google is happy.
There are other companies in the Alphabet that rarely bring a big jackpot, but, for example, Verily and Fiber contributed their $ 135 million to the common piggy bank.
All the numbers that company representatives call from the stage or from the screen tell the world that the company is overcoming development difficulties that are always there. This time, the report lets us understand that the global advertising market, which accounts for the lion's share of the company's profits, has sagged heavily and there could be losses. However, development will not stop there.
For a simple user, this is more of an opportunity to be surprised and imagine how much the largest companies in the world are turning around, and for investors it is a good or bad sign. In contrast to how they themselves assessed the company's chances of success and how they conducted their investment activities. Now they have received information and can make further decisions. We'll just continue to use the services. Moreover, such a company is unlikely to reduce the costs of their maintenance and development. So, everything will be fine. The crisis will end someday and everything will be the same again.