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Alphabet posts $112 billion net income in Q2, aided by SpaceX accounting
Alphabet reported $120 billion in Q2 revenue, and SpaceX gains contributed most of its $99 billion net gain on securities, while SpaceX shares have since fallen more than 30%.
Alphabet reported Q2 net income of $112 billion, highlighting one of its most profitable quarters on record, though the result comes with an accounting caveat tied to its SpaceX investment. According to The Motley Fool, Alphabet generated $120 billion in revenue in the quarter and its net profit largely reflects how it reports investment gains.
The outlet said Alphabet’s SpaceX position totaled $94.1 billion as of June 30, and SpaceX accounted for most of Alphabet’s $99 billion net gain on securities for the quarter. The key issue is that under accounting rules, Alphabet must recognize these investment gains in net income even if it has not sold the stake.
The story also points to the risk that the quarter’s earnings may not fully repeat. Since Alphabet’s Q2 ended, SpaceX’s stock has declined by more than 30%, which could negatively affect Alphabet’s net income in Q3 if the decline persists.
While the piece cautioned that net income may be boosted by investment marks, it added that investors should also examine operating income. The Motley Fool said Alphabet’s operating income rose 30% in Q2, excluding the investment gains.