It was a busy night in tech land as some of the world’s largest companies revealed how they fared during one of the most turbulent quarters in modern times. Here’s what you need to know about their performances in Q2.
Google’s parent company hit revenue expectations in Q2, but was rocked by the rapid decline of the ad market. Despite a huge surge in digital usage, the base of ad spend that it is dependent upon shrunk as uncertainty grips marketers.
- $2.6bn decline in ad revenue.
- $29.9bn of its $38.3bn revenue is from advertising.
- YouTube ad revenue increased 6% year-on-year, to $3.8bn.
- Search income fell from $23.6bn to $21.3bn.
- Google Cloud sales rose 43% to $3bn.
- Net income $6.96bn, down from $9.95bn.
“We continue to navigate through a difficult global economic environment,” said chief financial officer Ruth Porat.
Ad sales improved as the quarter progressed, but don’t be under any illusions – this was Alphabet’s first revenue decline in its history.
“We believe it is premature to gauge the durability of recent trends, given the obvious uncertainty of the global macro environment,” Porat said.
For the coming year, it has cut marketing spend by half. There is also a hiring freeze in place.
Unsurprisingly, Amazon’s business performed well during Q2, with people depending on online shopping for their daily needs. For April to June, its sales soared 40% and to meet this unexpected demand it hired 175,000 people in this period.
- Its strongest annual growth in years, Amazon brought in $88.9bn, ahead of an expected $81.53bn. Sales soared 40%.
- Amazon claims it spent $4bn on incremental Covid-19 related costs in Q2.
- Profits doubled to $5.2bn, compared to $2.6bn for the same period in 2019.
- AWS, the company’s cloud computing service, only grew 29% in the quarter (33% in Q1).
A day after Amazon’s founder and chief exec Jeff Bezos rejected claims his company acted like a ‘drug dealer’, he said in response to the earnings: “This was another highly unusual quarter, and I couldn’t be more proud of and grateful to our employees around the globe.
“As expected, we spent over $4bn on incremental Covid-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand – purchasing personal protective equipment, increasing cleaning of our facilities.“
Apple enjoyed across-the-board growth as consumers leaned into its goods and services, despite widespread retail closures.
iPhone sales were up 1.66% year-over-year, iPads by a third and its ’other’ category (including AirPods and the Apple Watch) was up 16.74%.
As a premium-priced product, will the consumer wallet be able to hold these levels in the coming quarter?
- Revenues rose 11%, bringing in $59.7bn – well above its estimated $52.25bn.
- International sales accounted for 60% of the quarter’s revenue.
- Every product line saw year-on-year growth, with iPhone revenue bringing in $26.42bn – a 1.66% growth. iPad revenue saw Apple’s biggest growth at $6.58bn, up from $4.88bn.
- Apple’s services revenue was up 14.85% year-on-year at $13.16bn.
Chief executive Tim Cook warned: “We’re conscious of the fact that these results stand in stark relief during a time of real economic adversity for businesses large and small, and certainly for families.”
Facebook had a slow quarter in the context of normal times. 11% growth showed the power of the platform, despite pressures from congress, the pandemic and a huge anti-hate boycott of more than 1,100 advertisers.