Global digital advertising giant Google has posted a strong quarter, with results beating Wall Street expectations. Revenues at Google Cloud rose 54.3%. Shares were up 3.8% before the opening bell.
Shares in Alphabet (GOOGL, GOOG), Google's parent company, rose 3.8% before the opening bell on Wednesday, to a new high in the past 52 weeks, after the company reported its second quarter 2021 results.
The global digital advertising leader posted record quarterly revenues and profits as global businesses actively resumed their advertising spending on the back of economic recovery, tourism and entertainment, the lifting of quarantine restrictions and rising consumer spending. However, Alphabet management did not release its financial outlook for the current quarter and year, pointing to rising COVID-19 incidents and continued uncertainty.
Google reports second quarter 2021
Earnings per share rose 169% to $27.26, beating market analysts' average estimate of $19.34.
Quarterly earnings rose to $18.53bn, up from last year's $6.96bn.
Total revenue rose 62% to $61.88 billion, also beating Wall Street estimates of $56.16 billion.
Google's advertising revenue from search and advertising services rose 68% to $35.84bn from last year's $21.32bn, but traffic attraction costs (TAC) also almost doubled to $10.93bn from last year's $6.7bn.
YouTube's ad revenue nearly doubled to $7 billion from forecasts of $6.37 billion.
Today, the YouTube service alone brings Google as much as Netflix (NFLX) earns. Netflix's revenue for the same second quarter was $7.34 billion.
Google Cloud revenues rose 54.3% to $4.63bn from last year's $3bn and were above analyst forecasts of $4.40bn.
Nicole Perrin, principal eMarketer analyst at Insider Intelligence, said: "The results exceeded our expectations across all three of Google's advertising businesses: search, Google services and YouTube."
For now, the Google Cloud division is still loss-making, but second-quarter losses more than halved from last year's figure: $591 million versus $1.43 billion.
Google increased its headcount to 144,000 employees from 127,500 a year ago.
One of the big news is that Alphabet announced a buyback of its Class A shares.