YouTube’s revenue growth cooled in the second quarter of 2020, but even with the COVID-19 pandemic Google’s internet video platform carved out year-over-year growth of 5.8%. Alphabet, Google’s parent company, posted a 2% decline in revenue — its first-ever revenue drop — while it still topped tempered Wall Street estimates.
For Q2, YouTube’s ad revenue was $3.81 billion, up from $3.60 billion in the year-ago period. But sales for the period were down from $4.04 billion in the first quarter, when YouTube’s advertising revenue boomed 33%.
Google “Search & Other” revenue was down 9.8% year over year, dropping by $2.3 billion to $21.32 billion for Q2.
Google saw a “modest” improvement in ad-sales trends in July, but “it’s premature to say we’re out of the woods” given macroeconomic uncertainty, Alphabet and Google CFO Ruth Porat said on the company’s earnings call.
Alphabet overall posted $38.30 billion in revenue (down 2%) while net income of $6.96 billion (or $10.13 per share) represented a 43% year-over-year decline. Analysts had forecast Alphabet second-quarter revenue coming in at $37.36 billion with EPS of $8.34.
Amid the relative advertising weakness, other lines of business — including YouTube subscriptions, Google Play and Google Cloud — grew to help offset the decline, according to Alphabet/Google CEO Sundar Pichai. Sales in the Google Cloud business jumped 43%, to $3.01 billion.
“As people increasingly turn to online services, our platforms — from Cloud to Google Play to YouTube — are helping our partners provide important services and support their businesses,” Pichai said.