Delivering an astonishing Q2, Google Cloud spiked its revenue by 54% and slashed its losses by 59% to make a powerful case that it is the world’s hottest vendor in the greatest growth market the world has ever seen.
On my weekly Cloud Wars Top 10 rankings, Google Cloud is #3. But given this performance, I’m certainly giving it a great deal of consideration for possibly overtaking #2 Amazon. Microsoft remains quite secure at #1.
Let’s put the Q2 numbers—revenue of $4.63 billion and a loss of $591 million—into context to show just how rapidly Thomas Kurian’s company is shifting from a feisty but undersized challenger to a share-snatching predator whose upside is massive.
To do that, here’s some data from my July 19 forecast and analysis called Google Cloud Surges Toward Profitability, Propelled by Hypergrowth—and I’ve added the new Q2 numbers in bold italics so you can see how they fit in:
Here’s why I believe—in spite of the 2020 loss of $5.61 billion—that Google Cloud’s breakeven point is imminent.
- Quarterly losses are shrinking in terms of absolute dollars and as a percentage of revenue.
- Q1 2020: on revenue of $2.78 billion, loss of $1.73 billion, equaling a whopping 62% of revenue
- Q2 2020: on revenue of $3.01 billion, loss of $1.43 billion, equaling 48% of revenue
- Q3 2020: on revenue of $3.44 billion, loss of $1.21 billion, equaling 35% of revenue
- Q4 2020: on revenue of $3.83 billion, loss of $1.24 billion, equaling 32% of revenue
- Q1 2021: on revenue of $4.05 billion, loss of $974 million, equaling 24% of revenue
- Q2 2021: on revenue of $4.63 billion, loss of $591 million, equaling 12.8% of revenue
- Revenue is growing at hyperscale, enabling Google Cloud to not only grab big chunks of market share but also drive huge economies of scale.
- Q1 2020: revenue growth of 51.9%
- Q2 2020: revenue growth of 43.3%
- Q3 2020: revenue growth of 44.6%
- Q4 2020: revenue growth of 46.7%
- Q1 2021: revenue growth of 45.7%
- Q2 2021: revenue growth of 54%
So not only is Google Cloud’s quarterly revenue getting significantly larger quarter after quarter, but its growth rate—already the fastest in the Cloud Wars Top 10 (excluding the relatively tiny Snowflake)—has surged from around 46% for the past few quarters to a stunning 54% for Q2.
We’ll have more analysis of Google Cloud’s blockbuster performance in the days to come, but I wanted to get these numbers out there for quick consideration.
Disclosure: at the time of this writing, Google Cloud was among the many clients of Cloud Wars Media LLC and/or Evans Strategic Communications LLC.
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