Google parent Alphabet posts $9 billion profit in Q2 2019

Sundar Pichai revealed Google’s cloud business had hit an annual revenue run rate of over $8 billion.

FILE - In this Dec. 17, 2018, file photo a woman walks past Google offices in New York. Alphabet Inc., parent company of Google, reports financial earnings on Thursday, July 25, 2019. (AP Photo/Mark Lennihan, File) (AP)

Riding on its advertising and Cloud business, Google's parent company Alphabet has reported revenue of $38.9 billion with net income of $9 billion for the second quarter (Q2) of 2019.

The advertising revenue was $32.6 billion for the second quarter -- compared to $28.09 billion during the same period last year. The company also announced a $25 billion stock buyback.

 

"Our effort to build a more helpful Google for everyone brings countless opportunities to help users, partners, and enterprise customers every day," Sundar Pichai, Chief Executive Officer of Google, said in a statement late Thursday.

Later, on an earnings call with analysts, Pichai revealed their Cloud business reached an annual revenue run rate of over $8 billion.

The positive results took Google stock up nearly 9 per cent at the end of trading on Thursday.

"From improvements in core information products such as Search, Maps, and the Google Assistant, to new breakthroughs in AI and our growing Cloud and Hardware offerings, I'm incredibly excited by the momentum across Google's businesses and the innovation that is fuelling our growth," said Pichai.

"With revenues of $38.9 billion, up 19 per cent versus the second quarter of 2018 and up 22 per cent on a constant currency basis, we're delivering strong growth," said Ruth Porat, Chief Financial Officer of Alphabet and Google.

"Our ongoing investments in compute capabilities and engineering talent reflect the compelling opportunities we see across the company," Porat added.

The company announced the traffic acquisition costs (TAC) increased 13 per cent to $7.24 billion in Q2.