On July 31, Google's parent company Alphabet released its second quarter earnings report as of June 30. The report shows that Alphabet’s total revenue in the second quarter was US$38.297 billion, which was a 22% decrease from US$38.944 billion in the same period last year. Excluding the impact of exchange rate changes, it was flat year-on-year.

Google’sparentcompany’snetprofitfell30%inthesecondquarter

In terms of profit, under the US GAAP, Alphabet’s second-quarter net profit was US$6.959 billion, a 30% decrease from US$9.947 billion in the same period last year; operating profit was US$6.383 billion, a 30% drop from US$9.118 billion in the same period last year; Diluted earnings per share was US$10.13, compared to US$14.21 in the same period last year, a year-on-year decrease of 29%.

According to the business sector, Alphabet’s Google division’s advertising revenue (consisting of website revenue and network revenue) in the second quarter was US$29.9 billion, down 8% from US$32.5 billion in the same period last year.

Among them, Google's website revenue in the second quarter was US$25.1 billion, down 12% from US$28.5 billion in the same period last year; network revenue, or AdSense program revenue, was US$4.7 billion, down 10% from US$5.2 billion in the same period last year.

In website revenue, Google search and other business revenue was 21.3 billion US dollars, compared with 23.6 billion US dollars in the same period last year; YouTube advertising business revenue was 3.8 billion US dollars, last year was 3.6 billion US dollars.

In other businesses of Google's division, the second quarter revenue of Google Cloud (Google Cloud) was US$3 billion, higher than the US$2.1 billion in the same period last year. Other revenue in the second quarter was US$5.1 billion, higher than the US$4.1 billion in the same period last year.

In addition, Alphabet’s total costs and expenses in the second quarter were US$31.9 billion, an increase of 7% from US$29.8 billion in the same period last year. Among them, Alphabet’s second-quarter revenue cost was US$18.6 billion, compared with US$17.3 billion in the same period last year; R&D expenditure was US$6.9 billion, compared with US$6.2 billion in the same period last year; ; General affairs and administrative expenses were 2.6 billion US dollars, compared with 2 billion US dollars in the same period last year.

After the earnings report was released, Google CEO Sundar Pichai (Sundar Pichai) and CFO Ruth Porat (Ruth Porat) held an analyst conference call.

Ruth Porat said that in terms of cost structure, the company will focus more on measures to improve short-term efficiency. She also proposed that the growth rate of the number of employees in 2020 will decline year-on-year. "Two factors are putting pressure on the growth of the number of employees. First, we have transferred some customer support from third-party vendors to Google’s internal operations center, and second, we are planning to acquire Fitbit."

As for analysts’ question that search trends were flat year-on-year as of the end of June, Ruth Porat analyzed that after a difficult quarter, user search activities have gradually returned to business topics, and advertisers’ advertising expenditures are also slowly increase. Although the company is generally satisfied with the gradual improvement in advertising revenue in the second quarter, considering the instability of the macro environment, it cannot be said that it has passed the storm at present.


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