Google’s parent firm Alphabet posts first revenue decline in history
Google parent company Alphabet saw its first revenue decline in its history. Alphabet had warned in last quarter that it was expecting to see the impact of coronavirus in the second quarter results, and it did the company. The total revenue for the quarter was USD 38.3 billion, against the USD 37.4 billion expected, but that marks a 2 percent decline from the second-quarter of 2019. Net income dropped to USD 6.9 billion, from USD 9.9 billion a year ago. Revenue for Searches on the platform was USD 21.3 billion, down from USD 23.6 billion.
Google Cloud showed revenue of USD 3 billion. Revenue for Alphabet’s Other Bets category that includes X lab, Waymo self-driving subsidiary, and other divisions like Verily life sciences unit showed a fall, to USD 148 million from USD 162 million a year ago. Other Bets witnessed an operating loss of USD 1.12 billion.
Ruth Porat, Chief Financial Officer of Alphabet and Google said, “In the second quarter our total revenues were USD 38.3 billion. We continue to navigate through a difficult global economic environment. The company said it has authorized USD 28 billion more in stock buybacks.
Porat also said that she was cautiously encouraged by the company’s growth near the end of the quarter, which ended June 30th, but we believe it is premature to track the durability of recent trends given the uncertainty of the global macro environment.”
CEO Sundar Pichai said, “As the economic
climate remained fragile due to the coronavirus pandemic, we saw the early
signs of stabilization as users returned to commercial activity online.”
Advertising revenue across Google’s properties declined 8 percent during the quarter, to USD 29.9 billion and was down by a nearly 10 percent drop in Google Search advertising revenue. However, YouTube ad sales grew by nearly 6 percent.
Pichai said, “YouTube and Google Play subscriptions saw very good traction in the quarter, with app and game downloads rising 35 percent. It added some large customers to its Cloud segment, including Deutsche Bank. Cloud also benefited from the number of people working from home during the pandemic.” He added that customers are choosing Google Cloud to either lower their costs by improving operating efficiency or to drive innovation.
Google’s other revenues, which include its hardware, Play Store, and non-advertising YouTube revenues witnessed USD 5.12 billion, up from USD 4 billion.
The Alphabet was one of four tech giants reporting quarterly this week, and the only one whose results showed a decline from the year-ago quarter.