What factors contributed to Google's improved net profit in 2024?

Google's improved net profit in 2024 can be attributed to several key factors:

1. **Revenue Growth**: Google's revenues grew by 14%, reaching $84.7 billion in the second quarter of 2024, driven by strong performance in the Google Cloud segment and increased adoption of AI automation tools by advertisers.
2. **Operating Leverage**: The company's cost control initiatives and stable staffing levels, with headcount remaining flat year-to-date, resulted in strong operating leverage. This allowed Google to expand operating profit margins significantly, excluding one-time severance and real estate charges.
3. **Profitability in Key Segments**:
- The Google Cloud segment outpaced its major competitors with a 29% revenue growth and achieved 11% profit margins, after reaching profitability just 18 months ago.
- The Search & Other segment, including Google Services, showed a 14% increase in revenues, contributing to the overall profitability.
4. **Increased Profit Margins**: Google's net profit margin improved consistently throughout 2024, with the highest at 29.38% in the first quarter and 28.6% in the fourth quarter.
5. **Investment in AI**: Despite the threat of OpenAI and generative AI, Google has been investing significantly in AI, with plans to spend nearly $50 billion in capital expenditures in 2024, a 50% increase from the previous year. This investment is likely to further differentiate Google's technical infrastructure and cost-to-serve advantage.

In summary, Google's improved net profit in 2024 is a result of robust revenue growth, efficient operating leverage, profitability in key segments, increased profit margins, and strategic investments in AI.

|code|Ticker|Name|Date|Net Income|Net Profit Margin|market_code|
|---|---|---|---|---|---|---|
|GOOGL|GOOGL.O|Alphabet A|2024 Q1|2.3662E10|29.3796|185|
|GOOGL|GOOGL.O|Alphabet A|2024 Q2|2.3619E10|28.6064|185|
|GOOGL|GOOGL.O|Alphabet A|2024 Q3|2.6301E10|29.0208|185|
|GOOGL|GOOGL.O|Alphabet A|2024 Q4|2.6536E10|28.6037|185|