Google parent company Alphabet‘s stock rose as much as 9% in after-hours trading as it crushed expectations for both earnings and revenue in its third-quarter earnings results, showing strong growth in advertising revenue across the board.
Here are the results.
- Earnings per share: $16.40 vs $11.29 expected, according to Refinitiv estimates
- Revenue: $46.17 billion vs $42.90 billion expected, according to Refinitiv estimates
- Google Cloud: $3.44 billion vs. $3.32 billion estimated according to StreetAccount.
- YouTube ads: $5.04 billion vs. $4.39 billion estimated, according to StreetAccount.
- Traffic acquisition costs (TAC): $8.17 billion vs. $7.66 billion according to StreetAccount.
The company beat estimates across the board, following its first-ever revenue decline in Q2. The results showed a strong rebound in its core advertising business, which was hit hard by customer spending pullbacks amid the Covid-19 pandemic. It follows similarly strong earnings reports by ad-driven online companies Pinterest and Snap earlier this month.
For the quarter ending September 30, the company brought in total advertising revenue of $37.10 billion, compared to $33.80 billion a year ago. YouTube ad growth was particularly strong, up 32% from a year ago. Fears of a search advertising crunch did not materialize, as the company’s “Search and Other” advertising category showed 6% growth from a year ago.
On the company’s earnings call, CEO Sundar Pichai said, “This year, including this quarter, showed how valuable Google’s founding product, search, has been to people.”
Pichai said starting next quarter, it will report operating income for its