Google parent company Alphabet has posted its most recent quarterly earnings, and things are looking good for the company. Alphabet reported revenue of $38.9 billion, growth of 19% year-over-year. Profits for the company reached $9.9 billion, up 201% compared to last year when Google was hit with the massive $5 billion fine in the EU for antitrust violations.
If you exclude that massive EU fine, profits were still up 13%. Google doesn't get particularly granular with its reports. It's "other services" segment where products like the Play Store and its hardware division reside grew significantly. Revenue in that segment was up 40% to $6.2 billion.
Google has admitted that it was having a hard time selling the Pixel 3 line of devices last year, but the company says that it has sold twice as many Pixel phones this quarter as it did in the same quarter a year ago. This can be directly attributed to the popular Pixel 3a and Pixel 3a XL, which are value-priced and offer a class-leading rear camera. New Pixel 4 and Pixel 4 XL devices are coming in the next few months, which could help drive Google's smartphone sales even higher.
Another bright spot was in ad sales, where Google saw its Q2 revenue increase by more than 16 percent to $32.6 billion (and thus putting it ahead of the consensus). “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 fueling our growth,” said Google CEO Sundar Pichai.
One sour spot for Alphabet was in its "other bets" segment where its experimental ventures are placed. These ventures aren't at a stage where they are earning profits, but the losses are starting to rack up. "Other bets" lost $989 million in the quarter, up from the $732 million loss in the previous quarter. However, when as a company you are racking up $9.9 billion in profits in a quarter, and other business fundamentals are sound, Wall Street isn't too concerned about Google losing nearly a billion dollars on moonshots.