Any worries about slowing growth at Google parent Alphabet may have been premature, judging from its earnings for the last quarter. The company’s stock jumped more than 7% in after-hours trading Thursday after Alphabet announced the results.
Alphabet reported $38.9 billion in revenue for the three months ending in June, above Wall Street’s $38.2 billion projection. That number was up 19% from the same quarter a year earlier.
The company also authorized a new $25 billion share buyback.
Alphabet’s previous quarter disappointed, as revenue increased by 17% from the prior year, missing Wall Street estimates. The company has developed a number of new business divisions, including cloud computing and hardware. But as its core advertising business matures, investors have begun to wonder whether those new areas of business can become as big as advertising is for Alphabet.
Advertising revenue for Google, which includes YouTube, grew 14% from the same period last year to $32.6 billion.
The most promising non-advertising business line has been cloud, which the company now projects to have an annual run rate of $8 billion. It is the third largest revenue driver for Alphabet, behind advertising and YouTube, Chief Financial Officer Ruth Porat said on a call with analysts following the earnings release.
Google CEO Sundar Pichai said the company recently broke ground on three new cloud data centers and launched its seventh cloud region in Asia Pacific in Osaka, Japan. Alphabet made another major investment in cloud last month with the $2.6 billion acquisition of business intelligence platform Looker.
Pichai also commented on the regulatory pressure that’s been increasing around the company and the broader tech industry. The Justice Department earlier this week announced a formal antitrust review of the nation’s biggest tech firms, and Facebook on Wednesday confirmed that it is facing its own antitrust investigation by the Federal Trade Commission.
“We have engaged in the process before,” Pichai said. “To the extent we have to answer questions, we will do so constructively. And to the extent there are concerns, we will address them as well.”
But he said the scrutiny will not keep the company from growing.
“I think for me, it’s important that we stay focused on building helpful products to users,” Pichai said. “That’s what we’ll stay focused on as a company.”