GOOGL Q2 Earnings Beat Estimates, Revenues Up Y/Y, Shares Rise
GOOGL's Services Ride on Search & YouTube
Google Services revenues increased 11.7% year over year to $82.54 billion and accounted for 85.6% of total revenues. The figure beat the Zacks Consensus Estimate by 3.28%.
Alphabet Inc. Price, Consensus and EPS Surprise
Alphabet Inc. price-consensus-eps-surprise-chart | Alphabet Inc. Quote
Google advertising revenues rose 10.4% year over year to $71.34 billion and accounted for 74% of total revenues. The figure beat the consensus mark by 3%. Search and other revenues increased 11.7% year over year to $54.19 billion, surpassing the Zacks Consensus Estimate by 3.04%. Search and other revenues accounted for 56.2% of total revenues. YouTube's advertising revenues improved 13.1% year over year to $9.77 billion, beating the consensus mark by 2.9%.However, Google Network revenues decreased 1.2% year over year to $7.35 billion but beat the consensus mark by 2.88%.Google subscriptions, platforms and devices revenues, formerly known as Google Other revenues, were $11.2 billion in the second quarter, up 20.3% year over year. The figure beat the consensus mark by 4.72%.Other Bets' revenues were $373 million, up 2.2% year over year, and accounted for 0.4% of the second-quarter revenues. The figure missed the consensus mark by 12.16%.
GOOGL's Operating Margin Expands Y/Y
Costs and operating expenses were $65.16 billion, up 13.7% year over year. As a percentage of revenues, the figure declined 10 basis points (bps) on a year-over-year basis to 67.6%.The operating margin was 32.4%, which expanded 10 bps year over year. Segment-wise, Google Services' operating margin of 40.1% contracted 10 bps year over year. Google Cloud's operating income was $2.83 billion compared with $1.17 billion reported in the year-ago quarter.Other Bets reported a loss of $1.25 billion compared with a loss of $1.13 billion in the year-ago quarter.
Alphabet's Balance Sheet Remains Strong
As of June 30, 2025, cash, cash equivalents, and marketable securities were $95.15 billion, down from $95.33 billion as of March 31, 2025.Long-term debt was $23.61 billion as of June 30, 2025, compared with $10.89 billion as of March 31, 2025. In May 2025, GOOGL issued fixed-rate senior unsecured notes with net proceeds of $12.5 billion.Alphabet generated $27.75 billion of cash from operations in the second quarter of 2025 compared with $36.15 billion in the first quarter of 2025. GOOGL spent $22.45 billion on capital expenditure, generating a free cash flow of $5.3 billion in the reported quarter.
Alphabet Raises Capital Expenditure Guidance
For 2025, Alphabet now expects to spend $85 billion on capital expenditures.
Zacks Rank & Stocks to Consider
Alphabet currently has a Zacks Rank #3 (Hold).Lam Research LRCX, Enovix ENVX and Meta Platforms META are some better-ranked stocks that investors can consider in the broader Zacks Computer and Technology sector.Meta Platforms shares have returned 22% year to date. The social-networking giant is scheduled to release second-quarter 2025 results on July 30. Meta Platforms sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here. Lam Research shares have surged 34.4% year to date. This wafer fabrication equipment and services provider is scheduled to release fourth-quarter fiscal 2025 results on July 30. Lam Research currently has a Zacks Rank #2 (Buy). Enovix shares have surged 33.9% year to date. The silicon-anode battery provider is set to report its second-quarter 2025 results on July 31. Enovix has a Zacks Rank #2.
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