Google (GOOGL  ) shares gapped up to all-time highs following the company's blowout second quarter earnings report. The company beat on the top and bottom-line with notable strength in YouTube revenue which seems set to overtake Netflix (NFLX  ) in terms of streaming revenue. It wasn't too surprising as many social media companies reported strength in ad rates. Overall, Google has benefitted from the economy's reopening and resumption of advertising from travel companies.

Inside the Numbers

Google reported $27.26 in earnings per share which topped estimates of $19.34 per share. This was a 167% increase from last year's Q2. Revenue came in at $61.9 billion, beating expectations of $56.16 billion which was a 69% increase from last year.

Breaking down the results by major segments, YouTube advertising revenue beat at $7 billion vs $6.4 billion., an 83% gain from last year. Based on current trends, it should overtake Netflix next quarter in terms of quarterly revenue. It also said that more people are watching YouTube through their TV as 120 million people currently watch YouTube on their TVs. YouTube shorts, which is the company's TikTok competitor, exceeded 15 billion daily views, a sharp increase from 6.5 billion daily views in March.

Gains were driven by higher ad rates and an increase in subscriptions to its premium product. Google Cloud revenue also beat at $4.6 billion vs $4.4 billion forecast by analysts which marked a 53% increase from last year and means that it maintains its position as the fastest-growing cloud platform although it's smaller than AWS or Azure.

Google's traffic acquisition costs were also slightly higher than expected at $10.9 billion vs the $9.7 billion forecast by analysts. This was the only portion of the earnings report that missed expectations.

Overall, the company benefited from the strong rebound in the economy which led to increased demand for ads. The biggest contributor was retail and travel segments. Retail was by far the largest contributor to the company's ad growth, said Google's chief business officer Philipp Schindler on the earnings call Tuesday.

Stock Price Outlook

Like other big winners in the tech and online advertising space, Google warned that revenue growth should materially slow with tougher comps and the economy returning to normal. This might be one factor in the stock price's lack of follow-through despite a bullish report.

However, it's easy to remember that a year ago marked the company's first revenue decline in the company's history. In hindsight, this was an excellent buying opportunity. Now, the company is benefitting from travel coming back online, growth in cloud and YouTube, and the continued dominance of search.