7/25/2023: Google Q2 Earnings Beat Expectations
Google reports Q2 2023 earnings after market close today. Revenue was $74.6B vs. $72.82B expected. EPS was $1.44 vs. $1.34 expected. YouTube ad revenue was $7.67B vs. $7.43B expected. YouTube revenue grew 4.5% YoY in Q2 vs. -2.6% in Q1. Google Cloud revenue was $8.03B vs. $7.84 expected. Google Cloud revenue grew 28% YoY in Q2 vs. 28% in Q1. Google Search revenue grew 4.77% YoY in Q2 vs. 1.87% in Q1. It was an all-around solid beat. GOOGL 0.00 stock was up 6+% after the earnings release.
In the earnings release, Google also announced that CFO Ruth Porat is transitioning into a new President/Chief Investment Officer role. She will continue to serve as the CFO until her replacement is found.
Overall, it’s a great quarter for Alphabet. The advertising business grew better compared to Q1 with YouTube ad revenue resumed YoY growth. The cloud business grew consistently at a high 28% YoY rate and the cloud business profitability has also improved in Q2. It is interesting that Google was able to grow ad revenue on YouTube. Snap also reports earnings today and they saw a 4% YoY decline of revenue in Q2. One possibility is that Snap is still adjusting to the Apple privacy change while YouTube has mostly fully adjusted so more ad budgets flew to YouTube. If this hypothesis holds, we should see Meta’s ad revenue grow better in Q2 compared to Q1 in tomorrow’s earnings release.