Google’s parent company, Alphabet, saw its stock jump 10 percent on Friday (July 26), just one day after posting estimate-beating Q2 results and gaining board approval to buy back $25 billion in Class C stock, according to a report by CNBC.
The company was on track to have its best day since July of 2015, and its market cap surged $80 billion, to $866 billion. The company reported earnings per share of $14.21, which soundly beat expectations of $11.30 per share. Revenue was at $38.94 billion, which also beat estimates of $38.15 billion.
Traffic acquisition costs (TAC) were lower than expected as well. TAC are the payments made to other companies, such as Apple, for default search engine privileges. Google’s TAC was $7.24 billion, which estimates put it at $7.27 billion.
Alphabet’s cloud business also saw significant gains, helmed by new leader Thomas Kurian. He’s in charge of making Google Cloud a viable alternative to Amazon Web Services and Microsoft Azure. The business recently bought analytics startup Looker.
CFO Ruth Porat said Google’s other revenue came largely from the cloud and came to $6.18 billion, which is up from $4.43 billion a year ago. CEO Sundar Pichai said the company’s cloud unit hit $8 billion in annualized revenue and that it’s going to triple its sales force in the near future.
Porat had previously put the blame on YouTube for a slowdown in the company’s revenue growth, but she said this quarter was a different story.
“YouTube was again the second largest contributor of revenue growth, and [we’re] really pleased with the ongoing momentum that we’re seeing here,” Porat said.
In May, Google started testing a new feature that placed shopping links underneath YouTube videos. The company displays a recommended product along with its price, and clicking on the link will take a user to Google Express, a marketplace where they can complete the purchase. The feature had been seen under some Nike videos.
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