July 28, 2023
Google Cloud reported its second-straight quarter of profits, with operating income of $395 million in the three months ending June 30. This is a significant improvement from the $590 million loss the cloud segment suffered in the same quarter a year ago.
The increase in profits was driven by strong growth in enterprise AI enthusiasm. Enterprise AI is a major growth area for Google Cloud, and the company reported that customer interest in its AI-optimized infrastructure, large language models, AI platform services, and new generative AI offerings is growing rapidly.
In addition to the increase in profits, Google Cloud also reported strong revenue growth of 28% year-over-year. This growth was driven by strong demand for cloud computing services from businesses of all sizes.
Google Cloud CEO Sundar Pichai said that the company is “excited about the moment overall in cloud” and that there is “definitely a lot of interest from customers on AI.”
CFO Ruth Porat said that Google Cloud is “combining various engineering efforts across core infrastructure and cloud” to support AI investments. She also said that the company is “experiencing headwinds in the second quarter for moderation in consumption growth as customers optimize their spend.”
Google Cloud still expects revenue to grow by 25% to 30% in 2023, and it expects to generate operating income of $1.5 billion to $2 billion.
The sources for this piece include an article in CIODIVE.
