A breakdown of Big Tech’s big Q2 earnings

31 Jul 2020

Image: © Pixavril/Stock.adobe.com

Alphabet, Amazon, Apple and Facebook all beat expectations in their latest earnings reports.

On Thursday (30 July), after a US congressional hearing questioned the practices of Amazon, Apple, Google and Facebook, the four companies released their earnings reports for the latest quarter.

During the antitrust hearing, which sought to determine if Big Tech holds too much power, the CEOs of these companies downplayed their dominance and argued that they still face aggressive competition. However, earnings reports outlined how the tech giants have experienced further growth over the course of the Covid-19 pandemic.

With more people staying at home to entertain themselves, work and shop, the four Big Tech firms managed to rake in a combined $28.6bn in net profits in a single quarter.

In after-hours trading, Apple shares were up 4.7pc, Amazon shares were up 4.9pc, Facebook shares were up almost 6.5pc and Google shares remained flat. Here’s a breakdown of how each company performed in the quarter.


Google’s parent company Alphabet reported its first revenue decline in history, however the firm still managed to beat Wall Street expectations. Revenue dropped from $38.9bn in Q2 of 2019 to $38.2bn in the latest quarter. Net income for the quarter was $6.9bn, down from $9.9bn in the same period last year.

Google’s ad business slowed as the pandemic resulted in tightened advertising budgets, with Google’s core search and ad revenue down 9.8pc year on year. YouTube ad revenue growth slowed too, though it surpassed expectations by achieving $3.81bn in revenue in Q2.

Revenue in Google’s cloud business, which includes both its infrastructure and productivity tools, saw a boost of 43.19pc year-on-year. In Q2 of 2020, this side of the business brought in $3.01bn in revenue for the company.

There was also a 25.6pc year-on-year growth in its ‘other’ revenues, which covers hardware and Google Play purchases, bringing in $5.12bn in Q2.


Amazon sales jumped by 40pc in Q2 of 2020 to $88.9bn, driven by increased demand caused by the Covid-19 pandemic. Net profit doubled from the same period last year to a record of $5.2bn. Amazon boss Jeff Bezos called it “another highly unusual quarter”.

Amazon Web Services surpassed $10bn in quarterly revenue, but the cloud service’s growth rate dipped below 30pc for the first time, increasing by 29pc in this quarter.

There was a significant increase in international sales, with revenue from Amazon’s overseas marketplaces jumping 38pc to $22.7bn. During the same quarter last year, Amazon experienced 12pc growth in this segment.

Amazon spent roughly $4bn on Covid-19-related initiatives in Q2 and the company said that it plans to spend a further $2bn on similar initiatives in the current quarter. This week, Bezos also announced that the firm now directly employees more than 1m people.


In the latest quarter, Apple posted revenue of $59.7bn, an increase of 11pc from the same quarter last year. The company said that international sales accounted for 60pc of the quarter’s revenue.

Apple boss Tim Cook said this was driven by double-digit growth in both products and services. The company saw strong performances in wearables, likely due to the increase of people exercising at home during the Covid-19 pandemic. Additionally, there was strong demand for iPhones, Macs and iPads during the same period.

Apple also confirmed that its next iPhone is set to ship later than the usual release window in September. The delayed iPhone 12 is expected to be the company’s first device with 5G compatibility.

The company announced a four-for-one stock split, saying that each Apple shareholder of record at the close of business on 24 August will receive three additional shares for every share held on that date. It also reported that is has $193.82bn in cash on hand, which is an increase from the previous quarter.


Social media giant Facebook reported revenues of $18.69bn, which is up 11pc on the same quarter last year. The company said that there are now 1.79bn daily active users on Facebook, and that across its “family” of apps, which includes Instagram and WhatsApp, it had 3.14bn monthly users at the end of Q2.

Despite a major advertising boycott of Facebook during the quarter, ad revenue was up by 10pc to $18.3bn. It expects similar year-on-year growth in the next quarter.

The company’s expenses in the second quarter increased by 24pc from the same period last year, excluding a settlement with the Federal Trade Commission last year.

Facebook’s ‘other’ revenue, which includes sales of Oculus VR headsets and Portal video-chatting devices, was up by 40pc compared to last year, with revenue hitting $366m.

Kelly Earley was a journalist with Silicon Republic