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Google Cloud Q2 Revenue Rises to $6.3B, But Operating Loss Deepens

Joseph F. Kovar

‘With an uncertain global economic outlook, our strategy to invest in deep technology and computer science to build helpful products for the long term is the right one. Our ability to take the long view stems from our timeless mission: To organize the world’s information and make it universally accessible and useful,’ says Alphabet and Google CEO Sundar Pichai.

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The Google Cloud business of parent company Alphabet grew to $6.27 billion in its most recent quarter, although the cloud unit is confronting a growing operating loss.

Sundar Pichai, CEO of Alphabet and Google, Tuesday told analysts during the Mountain View, Calif.-based company’s second fiscal quarter 2022 financial analyst conference call that his company had a strong overall quarter, and in particular saw good momentum in its cloud business.

“With an uncertain global economic outlook, our strategy to invest in deep technology and computer science to build helpful products for the long term is the right one,” Pichai said during his prepared remarks. “Our ability to take the long view stems from our timeless mission: To organize the world‘s information and make it universally accessible and useful.”

[Related: GOOGLE CLOUD CEO THOMAS KURIAN MAKES HIS MOVE]

Pichai noticed that Google’s quarterly cloud revenue surpassed the $6 billion mark for the first time.

“Q2 revenue grew to $6.3 billion, with momentum across Google Cloud Platform and Workspace,” he said. “We saw continued demand in all geographies. … We launched Google Public Sector in June, expanding our commitment to help U.S. government agencies and public institutions accelerate their digital transformations.”

Pichai said customers are choosing Google Cloud as their technology partner because of the company’s leadership in four areas.

First, he said, Google continues to lead in the data cloud market because it unifies data lakes, data warehouses, data governance, and advanced machine learning into a single platform that can analyze data across any cloud.

Second, Pichai said, many major companies choose Google’s open cloud infrastructure to modernize their IT systems on the Google Cloud, at the edge, or in their data centers.

The third area is cybersecurity, where Google is already protecting over 5 million websites, Pichai said.

“Google has always provided a secure cloud infrastructure,” he said. “And we continue to introduce new cybersecurity products that help customers detect, protect, and respond to a broad range of cybersecurity threats.”

The fourth is Google Workspaces, which Pichai said offers easy to use and secure communication and collaboration tools that are used by many organizations as they return to hybrid work.

Google continues to move its mission forward by advancing both knowledge and computing, Pichai said.

“Those goals are at the heart of what we do,” he said. “We know that our services are particularly helpful to people and businesses during uncertain moments, whether it‘s using search or YouTube to find anything from anywhere, or highly efficient tools like search ads that help businesses of all sizes reach customers, or Google Cloud, which helps companies adapt to hybrid work and find efficiencies.”

Pichai also said that Google is continuing to invest in areas like AI, search, and cloud, but in what he called a way that is responsive to the current environment.

“Early this month, I announced that we will be slowing our hiring and sharpening our focus as a company,” he said. “We are focused on hiring engineering, technical, and other critical roles. And we are working to improve productivity and ensure that the great talent we do hire is aligned with our long-term priorities.”

For its second fiscal quarter 2022, which ended June 30, Google reported total revenue of $69.7 billion, up 13 percent over the $61.9 billion the company reported for its second fiscal quarter 2021. However, that growth paled when compared to the 62 percent growth the company reported in the second fiscal quarter 2021 vs. the same period of 2020.

That included Google Search and related revenue of $40.7 billion, up from $35.8 billion; YouTube add revenue of $7.3 billion, up from $7.0 billion; Google Network revenue of $8.3 billion, up from $7.6 billion, and Google Cloud revenue of $6.3 billion, up from $4.6 billion.

The 35.6-percent year-over-year growth in Google Cloud revenue far exceeded the 12.6-percent growth in overall revenue.

However, Google Cloud was hit by an operating loss of $858 million, significantly higher than the operating loss from a year ago of $591 million.

For the quarter, Google as a whole reported GAAP net income of $16.0 billion or $1.21 per share, down from last year’s $18.5 billion or $1.36 per share.

Joseph F. Kovar

Joseph F. Kovar is a senior editor and reporter for the storage and the non-tech-focused channel beats for CRN. He keeps readers abreast of the latest issues related to such areas as data life-cycle, business continuity and disaster recovery, and data centers, along with related services and software, while highlighting some of the key trends that impact the IT channel overall. He can be reached at jkovar@thechannelcompany.com.

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