Alphabet is still very much an advertising company and its CFO wants to make sure Wall Street knows that it’s spending its money accordingly.
Though the stock surged after Alphabet beat expectations on its second quarter earnings, its capital expenditures were eye-catching: Capital spending nearly doubled year-over-year to $5.5 billion. Its operating expenses, meanwhile, hit $10.9 billion, up 24 percent year-over-year.
In the earnings call, CFO Ruth Porat attributed the capex increase to production equipment, data center construction, and office space. Although building out data centers is important as Google’s Cloud business tries to catch up to Amazon and Microsoft, Porat also noted that these computers power the machine learning in its core products, like search and ads.
Later in the call, she used a question about how Google prioritizes investment across Cloud, hardware, and its app store, Play, to drill back down on Alphabet’s focus on advertising.
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