Google sets all-time records as search and YouTube profits soar

Last quarter, Google roared out of the post-pandemic period with record profits of $17.9 billion, eventually joining other tech giants who made it in despite (or perhaps because of) the rise of COVID-19. But Alphabet’s second quarter 2021 revenue is doing even better, with the company posting record revenues of $61.9 billion this quarter and a record profit for the fourth straight quarter of $18.5 billion. Some figures the company publishes today (PDF) are almost double those of a year ago.

Google Search seems to be the big driver, up more than $14 billion since this time last year to $35.8 billion in total (that’s nearly $4 billion up on last quarter as well). YouTube’s ad revenue also grew massively, nearly doubling to $7 billion, compared to $3.8 billion last year. That’s also $1 billion more than YouTube netted in the past quarter. The company also says its YouTube Shorts have been a huge success, with 15 billion daily views (up from 6.5 billion in March).

As you can see from Jon Erlichman’s tweet below, we don’t see this kind of growth every year!

A big question was whether this would be the quarter that Alphabet’s fast-growing Google Cloud business would stop bleeding money, after the first quarter’s bleed had dwindled to just under a billion. While the division is still not profitable, the second quarter shows it lost only $591 million as revenue grew from $4 billion last quarter to $4.6 billion this year. (Cloud made $3 billion last year.)

Wondering how Google’s hardware business is doing ahead of a possible new Pixel 6 Pro and perhaps another foray into smartwatches later this year? Unfortunately, Google isn’t releasing hardware numbers yet, but there’s an “Other Google” category that includes other items as well. It now brings in $6.6 billion in revenue, up from $5.1 billion a year ago.

During its second quarter earnings call, Google CBO Philipp Schindler suggested the high numbers were due to consumer spending — as has been the story for some time now, the pandemic has contributed to a massive surge in shopping and as a giant advertiser with both search and like YouTube, Google is ready to take advantage.

CFO Ruth Porat did suggest that the company will have more sales and marketing expenses later this year to support some of the product launches for the holiday season.

Correction: Q2 was the fourth consecutive quarter of record profit for Alphabet, not the third.