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YouTube Q2 ad revenue hits record $7 billion as Alphabet trounces estimates

YouTube accelerated back into high growth for the second quarter of 2021, as ad revenue hit a record $7.0 billion for the period.

Advertising revenue at the world’s biggest video platform jumped 84%, up from $3.81 billion in the year-earlier period when COVID put a damper on marketing spending. Alphabet, Google’s parent company, reported YouTube’s ad revenue as part of its Q2 earnings — which blew past Wall Street expectations.

Overall, the internet giant posted revenue of $61.88 billion and net income of $18.5 billion (or $27.26 per share) — also quarterly records. Analysts on average expected Alphabet to report Q2 revenue of $56.02 billion and EPS of $19.21, according to financial research provider Refinitiv.

“In Q2, there was a rising tide of online activity in many parts of the world, and we’re proud that our services helped so many consumers and businesses,” Sundar Pichai, CEO of Google and Alphabet, said in announcing the results. “Our long-term investments in AI and Google Cloud are helping us drive significant improvements in everyone’s digital experience.”

On the earnings call, Pichai called out the momentum behind YouTube Shorts — the platform’s TikTok-like short form video feature — announcing that it is now generating more than 15 billion global daily views, up from 6.5 billion in March.

Revenue for Google Search came in at $35.85 billion in the second quarter, up 68% year over year. Google Cloud revenue jumped 54%, $4.63 billion, while the division narrowed its operating loss to $591 million (versus $1.43 billion a year prior).

The revenue gains by Google and YouTube in the most recent quarter come after the company experienced a sales slowdown in Q2 of 2020, as advertisers pulled back on spending in the earlier days of the COVID pandemic. Google’s revenue growth in Q2 benefited from “lapping the effects of COVID last year,” Alphabet CFO Ruth Porat said on the earnings calls. That benefit, she added, will “diminish through the balance of the year as we begin to lap stronger performance in the second half of 2020.”

Note that the ad revenue reported for YouTube excludes fees for subscription-based products such as YouTube Premium and YouTube TV.

Alphabet reported 144,056 as of the end of June, up 13% from 127,498 a year prior. Variety

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