Alphabet Inc. (NASDAQ:GOOG) reported quarterly earnings that beat analysts’ expectations on Thursday. The company posted earnings of $8.42 a share on $21.5 billion in revenue. According to Thomson Reuters, Wall Street analysts expected the company to report earnings of $8.04 a share on $20.76 billion in revenue. Last quarter, Alphabet reported $20.3 billion in revenue and $3.6 billion in net income. In the second quarter last year, Alphabet’s revenue had risen 11 percent year-over-year. This time it’s up 21 percent year-over-year compared to the second quarter of 2015.
Both Class A and Class C shares of Alphabet gained more than 4 percent in extended trading. In the second quarter, Alphabet repurchased 2.0 million shares of its Class C capital stock for a total amount of $1.4 billion.
Last year, Alphabet was created as a holding company by Google’s founders. The Google division generates most of the company’s money. A separate category includes projects like Google Ventures, Google Fiber, Nest Thermostats, Alphabet’s self-driving cars and science initiatives Calico and Verily.
Revenue for the projects segment came in at $185 million for the quarter, higher than analyst expectations of $168.2 million in revenue. Smart thermostat maker Nest nearly doubled its revenue year-over-year in the second quarter. Alphabet is also profiting from shifts in the entertainment industry with its YouTube offering. Google CEO Sundar Pichai said, “We reach more [people] 18 to 34 and 18 to 49 than any other TV network, broadcast or cable. Every indication we see is that the growth is very, very strong and being driven by mobile.”
Alphabet reported advertising revenue increased 19 percent to $19.14 billion. Aggregate paid clicks were 29 percent higher than the same period last year, while paid clicks on Google websites were up 37 percent year over year. Alphabet’s core advertising business has often been questioned as the net value of its ads has been in decline. Its cost-per-click is still declining, down 7 percent this quarter compared to the same quarter last year.
The company is now testing driverless cars in Mountain View, California; Austin, Texas; Kirkland, Washington, and Phoenix. CFO Ruth Porat said in a statement, “We’re focused on fully autonomous cars because in early testing we saw the risk of depending on drivers to remain engaged once you give them the option to switch off.” The tests have totaled more than 1.6 million miles to date.