10-QPeriod: Q2 FY2019

Alphabet Inc. Quarterly Report for Q2 Ended Jun 30, 2019

Filed July 26, 2019For Securities:GOOGLGOOGGOOGMGOOGN

Summary

Alphabet Inc. reported strong financial performance for the second quarter and first half of 2019. Total revenues reached $38.9 billion for the quarter, a 19% increase year-over-year, and $75.3 billion for the first half, up 18% year-over-year. This growth was primarily driven by Google's advertising business, including Search and YouTube, and significant contributions from Google Cloud and Google Play. Net income for the quarter was $9.9 billion, resulting in diluted earnings per share of $14.21. The company maintained a robust balance sheet with $121.1 billion in cash, cash equivalents, and marketable securities as of June 30, 2019, and generated $24.6 billion in operating cash flow for the first half of the year. Investments in property and equipment continued, reflecting ongoing infrastructure expansion. The company also announced a pending acquisition of Looker for $2.6 billion.

Financial Highlights

49 data points
Beta

Revenue

$38.94B

55.6% Gross Margin

Net Income

$9.95B

25.5% Net Margin

EPS (Diluted)

$0.71

Total Assets

$257.10B

Cash & Equivalents

$16.59B

Free Cash Flow

$6.50B

Financial Statements
Beta
Revenue$38.94B
Cost of Revenue$17.30B
Gross Profit$21.65B
R&D Expenses$6.21B
Operating Expenses$29.76B
Operating Income$9.18B
Interest Expense$25.00M
Net Income$9.95B
EPS (Basic)$0.72
EPS (Diluted)$0.71

Key Highlights

  • 1Total revenues grew 19% year-over-year to $38.9 billion in Q2 2019, with constant currency revenue growth at 22%.
  • 2Net income for Q2 2019 was $9.9 billion, yielding diluted EPS of $14.21, a significant increase from $4.54 in the prior year period.
  • 3Total cash, cash equivalents, and marketable securities stood at a healthy $121.1 billion as of June 30, 2019.
  • 4Operating cash flow for the first six months of 2019 was $24.6 billion, demonstrating strong operational cash generation.
  • 5Google segment revenues, comprising the vast majority of total revenue, saw a 19% increase year-over-year.
  • 6Other Bets revenue showed a modest increase of 12% year-over-year to $162 million, while operating losses in this segment widened.
  • 7Alphabet announced the pending acquisition of Looker for $2.6 billion in cash, expected to strengthen Google Cloud.

Frequently Asked Questions

Alphabet reported total revenues of $38.9 billion for the second quarter of 2019, representing a 19% increase compared to $32.7 billion in the same period of 2018. On a constant currency basis, revenue growth was 22%.

The Google segment, which includes advertising, Google Cloud, and hardware, generated $38.8 billion in revenue, up 19% year-over-year. The 'Other Bets' segment, encompassing ventures like Waymo and Verily, reported $162 million in revenue, an increase of 12% year-over-year. However, 'Other Bets' also continued to incur operating losses, which widened compared to the prior year.

As of June 30, 2019, Alphabet held $121.1 billion in cash, cash equivalents, and marketable securities. For the first six months of 2019, the company generated $24.6 billion in cash from operating activities, demonstrating strong operational cash flow.

Yes, Alphabet announced in June 2019 an agreement to acquire Looker, a data analytics platform, for $2.6 billion in cash. This acquisition is expected to enhance Google Cloud's capabilities and is anticipated to close later in the year, subject to regulatory approvals.