Despite facing a myriad of uncertainties such as the global pandemic, inflationary concerns over the U.S. economy, restless employees challenging management, and regulatory bodies and politicians seemingly eager to profit from the situation, one constant remains for Alphabet Inc., Google's parent company: its ability to generate substantial profits.

On Tuesday, Alphabet reported a 36% increase in profits for the last quarter of 2021, reaching $20.64 billion, with revenues hitting $75.32 billion, a 32% increase from the same period last year. This earnings report exceeded analysts' expectations of $19 billion in profits and $72.3 billion in revenues, as compiled by FactSet.

Alphabet's stock price surged by 8% in after-hours trading from its closing price of $2,752.88. The company also announced a 20-for-1 stock split, a move that is typically well-received by the market as it makes each share more affordable.

Following Apple's record-breaking quarterly results just five days prior, Google's impressive earnings further demonstrate that tech giants continue to reap substantial profits despite supply chain constraints, inflationary concerns, and the ongoing pandemic.

Google's robust performance serves as a reminder of the underlying strength of its business and its ability to thrive regardless of the surrounding environment, as long as people remain active online.

Google Search remains the internet's go-to entry point, while YouTube is a significant online destination for entertainment, information, and music. Although trailing behind Amazon and Microsoft, Google is well-positioned to capitalize on the massive shift of businesses outsourcing their technological infrastructure to the cloud.

With a solid foundation, Google has made several adjustments to solidify its advantages. The company has changed the way retailers list products to attract more users to start their online shopping from Google or YouTube. A recent Morgan Stanley survey found that the proportion of people starting shopping searches on Google and YouTube has increased since May, while the proportion of Amazon Prime users starting searches on Amazon has decreased.

While Facebook and other internet companies have felt the sting of stricter privacy controls implemented by Apple on its devices, Google's advertising business, including ads on YouTube, continues to expand, growing by 32% to $61.2 billion in this quarter.

YouTube has introduced short-form videos (under 60 seconds) to compete with TikTok and attract a younger audience. Google has stated that the number of salespeople in its cloud division has more than tripled since 2019, as part of an effort to expand into new industries and establish partnerships. Google Cloud's revenue grew by 45% to $5.5 billion, and the division's losses narrowed to $890 million, down from $1.24 billion in the same period last year.

Google has reported hiring 6,500 employees in this quarter, bringing the total number of employees to 156,500. Alphabet's Chief Financial Officer, Ruth Porat, has indicated that the "strong hiring pace" is expected to continue into 2022.

She also noted that she anticipates a "significant increase" in capital expenditures for this year, including the costs of constructing or renovating office buildings.

During a conference call, Alphabet's CEO Sundar Pichai addressed potential antitrust legislation being discussed in Congress. Pichai expressed concerns that these proposals could "disrupt" Google's broad range of services and harm the company's ability to protect users.

Echoing the sentiments of Meta, Facebook's parent company, Pichai also suggested that proposals targeting large tech companies "could hurt American competitiveness" as they might put U.S. companies at a disadvantage.
 

Alphabet annual/quarterly net income history and growth rate from 2010 to 2024. Net income can be defined as company's net profit or loss after all revenues, income items, and expenses have been accounted for.

• Alphabet net income for the quarter ending June 30, 2024 was $23.619B, a 28.59% increase year-over-year.
• Alphabet net income for the twelve months ending June 30, 2024 was $87.657B, a 43.81% increase year-over-year.
• Alphabet annual net income for 2023 was $73.795B, a 23.05% increase from 2022.
• Alphabet annual net income for 2022 was $59.972B, a 21.12% decline from 2021.
• Alphabet annual net income for 2021 was $76.033B, a 88.81% increase from 2020.