WAYMO THAN BEFORE

The EU can’t stop Alphabet from bringing in a ton of cash

Yet again, Alphabet had a massive quarter, and yet again, that was almost entirely down to Google’s advertising business.

The company posted revenue of $26.01 billion—up over 20% from the same quarter a year earlier, making it the company’s second-best quarter ever, after the 2016 holiday quarter.

Even after paying $2.7 billion to the European Commission for antitrust violations in the EU this quarter, Google still managed to post operating income of $4.1 billion. The company made a point of showing that without the fine its operating income would’ve been $6.86 billion.

Wall Street was less impressed, however: Even after beating the market’s expectations, the company’s stock was down about 3% at the time of publishing. The stock was up nearly 30% on the year before today.

The overwhelming majority of Alphabet’s revenue—roughly 87%—came from advertising on its own sites, other sites, and mobile devices. Alphabet generated about $3.34 billion from its non-advertising businesses within Google, and Alphabet’s other subsidiaries.

But as the company aims to diversify its revenue away from just advertising—analysts suspect it’s likely that its share of the online ad market will remain stagnant over the next few years—it seems Google’s other businesses are indeed growing. Alphabet doesn’t break down in much detail Google’s non-advertising businesses other than advertising. It lumps everything else, from its Pixel smartphone and other hardware products, and its YouTube Red and TV streaming services, to its cloud computing and storage offerings, into one bucket on its earnings reports labeled “other revenues.” This bucket generated $3.09 billion this quarter, up 42% from a year earlier.

“We’re delivering strong growth with great underlying momentum, while continuing to make focused investments in new revenue streams,” Ruth Porat, Alphabet’s chief financial officer, said in a release. Porat and Google CEO Sundar Pichai have spoken about Google’s largest investments, and potentially the company’s future, living in the cloud.

However, Alphabet’s “Other Bets”—the group of companies it runs attempting to solve major problems, such as cure disease and make us live longer through Verily and Calico Labs; self-driving cars with Waymo; and other companies like its high-speed internet company Fiber and its connected-device company Nest—are still underperforming. The group’s revenue was up 34% to $248 million over the same period last year—making this its second-best quarter ever by that measure—but it lost $772 million to bring in that revenue. Still, the division is trimming its losses, as management aims to prove it’s working on marketable products:

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