Now that the second quarter Internet earnings reporting period is mostly in the books, there are several trends that have emerged. Chief among them is that Facebook and Google parent Alphabet were the standouts this time around – even though both face more difficult comparisons in the second half of this year.

Facebook’s, Alphabet’s leads widen

In a report dated August 5, Nomura analyst Anthony DiClemente listed some key takeaways they have observed over the course of the second quarter earnings reporting period for Internet companies. They highlighted Facebook and Alphabet in particular as they said growth in Internet ad revenue in the U.S. dominated the second quarter prints. They said the second quarter results again cemented the two digital ad giants as “the outsized beneficiaries of secular ad market shifts to digital advertising platforms.”

They added that Facebook and Alphabet both enjoyed sequential accelerations in ad revenue, with Facebook’s ad revenue growing 63% and Google’s ad revenue growth increasing 20% year over year in the second quarter. They added that in particular, strength in video ads boosted the results of both companies and that Google enjoyed a boost from mobile search ads.

Facebook, Alphabet

Both Facebook and Alphabet have more difficult comparisons in the second half of this year, but the Nomura team adds that the degree of deceleration in revenue that has been factored into current estimates indicates that these difficult comparisons are already understood quite well.

Facebook, Alphabet

Twitter, Pandora Media take a hit from weaker demand

As Facebook and Google got stronger during the second quarter, Twitter and Pandora Media got weaker as demand on smaller platforms resulted in deceleration. Both companies reported revenue growth deceleration and missed estimates. Twitter’s third quarter guide indicates that this trend is expected to last through the end of the year as management called for revenue growth to decelerate to the mid-single digits.

Pandora said demand for national ads in the Telco and Entertainment verticals was especially weak, resulting in a slowdown in monetization.

Facebook, Alphabet

Facebook and others focus on controlling costs

For the Internet firms that beat estimates for EBITDA, the major trend was cost discipline, DiClemente and team said. They note that EBITDA upside was the one big consistent theme across the Internet sector despite the major divergence in growth trajectories. They note that while Yahoo and Twitter were weak in revenue and Alphabet and Facebook were strong, all four companies, plus Netflix, improved their expense management in the second quarter.

Facebook, Alphabet

They added that Facebook narrowed its given range of full-year expense outlook, and Alphabet said investments in artificial intelligence are driving better efficiency in its infrastructure. Twitter reduced its spending on research and development, but they believe this will be difficult to keep doing because of its new products.

Stock-based compensation a key focus

Another major trend among Internet firms is stock-based compensation. This isn’t a new issue, but it is one that is catching the eyes of analysts and investors more and more. One of the biggest concerns some market watchers have is that it is typically a recurring expense, but tech companies that issue a lot of shares as compensation typically exclude it from their GAAP results.

The Nomura team reported that the differences in valuation widened all across their coverage universe after the second quarter reporting period. They add that Facebook, Alphabet and Netflix are all now about 20% more expensive when adding in impacts from stock-based compensation. However, Pandora Media and Twitter, both of which are struggling right now, are “significantly more demanding” after considering stock-based compensation, they explained.

Facebook, Alphabet

DiClemente explained that when including SBC, Twitter’s valuation soars to almost 90 times estimated 2017 EV/ EBITDA. He estimates that Pandora doesn’t generate any EBITDA until almost 2019 when including SBC. He adds that such rich GAAP valuations may point to the possibility of strategic value presented by small Internet companies to a larger acquirer in an M&A scenario.