Alphabet (GOOG) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue reached $84.7B, up 14% year-over-year, driven by strong Search and Cloud momentum, with Cloud surpassing $10B in revenue and $1B in operating profit for the first time.

• Net income rose to $23.6B, a 29% increase from Q2 2023, with diluted EPS at $1.89, up from $1.44.

• Operating income increased 26% to $27.4B, with operating margin improving to 32% from 29% a year ago.

• AI initiatives and product innovation drove engagement, with Gemini models integrated across major products and AI Overviews boosting Search usage.

• Alphabet paid its first quarterly dividend of $0.20 per share and repurchased $15.6B in stock during the quarter.

Financial highlights

• Consolidated revenues reached $84.7B, up 14% year-over-year (15% in constant currency), with Google Services revenue at $73.9B and Google Cloud at $10.3B.

• Operating income was $27.4B, up 26%, and net income totaled $23.6B.

• Free cash flow was $13.5B for the quarter; operating cash flow was $26.6B.

• Cash, cash equivalents, and marketable securities totaled $100.7B as of June 30, 2024.

• CapEx was $13.2B, mainly for technical infrastructure, servers, and data centers.

Outlook and guidance

• Expect continued operating margin expansion for full-year 2024 versus 2023, with ongoing investment in AI and Cloud.

• Q3 margins will reflect higher depreciation and expenses from increased technical infrastructure investment and earlier hardware launches.

• CapEx expected to remain at or above Q1 levels ($12B) throughout the year, focused on AI and data centers.

• Alphabet intends to continue quarterly dividends, subject to board approval.

• Management expects effective tax rate and cash tax payments could rise in future years due to global tax changes.