Alphabet Earnings (GOOGL) Second Quarter 2021

Alphabet reported second quarter 2021 earnings after the bell. The stock was up more than 3% after hours on strong numbers, which crushed analyst expectations.

Here are the results.

  • Earnings per share (EPS): $ 27.26 versus $ 19.34 per share, according to Refinitiv estimates.
  • Income: $ 61.88 billion versus $ 56.16 billion, according to Refinitiv estimates.
  • YouTube ad revenue: $ 7.00 billion versus $ 6.37 billion expected, according to StreetAccount estimates.
  • Google Cloud revenue: $ 4.63 billion versus $ 4.40 billion expected, according to StreetAccount estimates.
  • Traffic Acquisition Costs (TAC): $ 10.93 billion versus $ 9.74 billion expected, according to StreetAccount estimates.

Google’s total advertising revenue increased to $ 50.44 billion, up 69% from the prior-year quarter, which was affected by the onset of the Covid pandemic.

Retail was by far the largest contributor to the company’s advertising growth, Google’s chief commercial officer Philipp Schindler said at Tuesday’s earnings call.

YouTube’s revenue amounted to more than $ 7 billion, up 83% from last year, approaching Netflix’s quarterly revenue of $ 7.34 billion.

Schindler called connected television “the fastest growing consumer area we have,” noting that the company has more than 120 million people who watch YouTube on their televisions each month.

YouTube Shorts, the company’s new TikTok competitor, just surpassed 15 billion daily views, CEO Sundar Pichai said on the call. That’s more than 6.5 billion daily visits in March.

Google Cloud generated $ 4.63 billion, up from $ 3.01 billion a year ago.

The cloud business had an operating loss of $ 591 million, a dramatic improvement over the loss of $ 1.43 billion last year. Google Cloud includes infrastructure and data analytics platforms, collaboration tools like Google Docs and Sheets, and “other services for business customers.”

The company also posted a quarterly net income benefit of $ 561 million and an EPS benefit of $ 0.83, from an accounting change related to the useful life of its server and network equipment. That change took effect at the beginning of the year.

Alphabet CFO Ruth Porat said she expects “a more moderate tailwind for revenue in the third quarter.” He said it is too early to forecast longer-term trends as markets reopen, especially given the growth in Covid case rates.

Pichai kicked off the earnings call by encouraging everyone to get the Covid-19 vaccine, while Porat told CNBC that the company’s work plans are still on track for September. Employees will be allowed to “volunteer work from home” at least until the beginning of that month, he added.

CNBC’s Deirdre Bosa contributed to this report.

Correction: An earlier version of this story incorrectly attributed and quoted a Google executive’s statement about YouTube’s audience on televisions. The executive was Phillip Schindler, and he said that connected TV is the fastest growing “surface” the company has.

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