Alphabet, the parent firm of Google, seems to be dotting its “I”s and crossing its “T”s as the company delivered third-quarter results that showed traction in advertising, mobile initiatives and emerging technologies.
Earnings of $9.57 a share handily topped previous estimates of $8.31; that bottom line grew 33 percent, outpacing revenue growth that was up 24 percent, coming in at $27.8 billion.
Drilling down into the top line a bit, advertising revenue was 87 percent of sales, growing by about 23 percent per year and ending at $24.1 billion. Paid clicks gained 47 percent, even as costs per click were down 18 percent.
TAC, or traffic acquisition costs, comprised 23 percent of the advertising revenues line, up two percentage points from last year.
The “other revenues” line, which includes hardware such as smartphones and cloud-based businesses, was up 40 percent at $3.4 billion.
The YouTube service has 100 million viewing hours daily on a global basis, which is up 70 percent through the past year.
As for “other bets,” which includes emerging technologies, sales were up 53 percent to $302 million, and operating losses were softened a bit, to $812 million from $861 million. That segment was buoyed by companies such as Google X, Nest and Waymo.
Ruth Porat, CFO of Alphabet, said that results in mobile search were “tremendous.” Regionally speaking, Asia-Pacific showed notable growth in mobile, up 29 percent year over year to $4.2 billion.
The growth in Asia comes after what Google’s CEO, Sundar Pichai, said had been a “very long time” of focus, where mobile is a “secular shift” and investment in the region will continue. Management noted efforts that were company-specific (such as those in India via payments application Tez, with 7.5 million users) and advertisers in Japan and Vietnam have grown by 25 percent or more through the past year.
Porat called out “the expanding capabilities of both software and hardware.” And Pichai stated that in terms of artificial intelligence, “we are already rethinking how to build products around machine learning.” He also gave a nod to Google Assistant, including references to devices that use the Assistant, including Home Max, the smart speaker and the smartphone Pixel 2.
Some Killer Stats:
3Q Revenues: $27.8 billion
3Q Revenue Growth: 24 percent
Emerging Technologies Sales Growth (Other Bets): 53 percent (year over year)
India payments app Tez users: 7.5 million
“Other Revenues” growth (includes smartphone and cloud-based business): 40 percent