Google's advertising powerhouse fuels 21pc revenue growth at parent company
Online advertising has fuelled a better-than-expected 21pc jump in revenues for Alphabet, the parent company of Google, while careful cost-control helped the firm to surpass profit forecasts.
Relieved investors sent Alphabet’s shares up 5pc in after-hours trading after the internet giant, which missed forecasts in April, reported a robust performance over the past three months.
Revenues at the Silicon Valley group rose to $21.5bn in the three months to the end of June, or 25pc when stripping out the effects of currency movements. Once partner websites took their cut of Google's advertising proceeds, revenues were better than expected at $17.5bn.
Net income jumped 24pc on the same period last year to $4.88bn.
Ruth Porat, chief financial officer said the “terrific” figures “reflect the successful investments we've made over many years in rapidly expanding areas such as mobile and video. We continue to invest responsibly in support of our many compelling opportunities.”
Alphabet’s “other bets” segment - which groups together futuristic projects such as Nest connected homes, self-driving cars and its Calico life expectancy work - posted widening losses of $859m, up from $660m a year ago. However, revenues from these "mooshot" schemes more than doubled to $184m.
Alphabet’s costs continued to rise to $7.4bn, although this represented a smaller share of revenues this quarter, down from 36pc a year ago to 34pc.
The business now employs 66,575 people, up from 57,148 a year ago.Spending on research and development soared 20.6pc to $3.36bn, with cash injections for both the mechanics of the core Google site and newer ventures.
Meanwhile, the firm spent $1.5bn on stock-based awards, up from $1.1bn.