alphabet The company announced third-quarter profits that exceeded analysts’ expectations. Shares rose 5% in after-hours trading.
Here’s how the company performed compared to the expectations of analysts surveyed by LSEG:
Revenue: $102.35 billion vs. estimated $99.89 billion Earnings per share: Adjusted $3.10 vs. estimated $2.33
Wall Street also took note of several other numbers in the report.
YouTube Ad Revenue: $10.26 billion vs. $10.01 billion (via StreetAccount) Google Cloud Revenue: $15.15 billion vs. $14.74 billion (via StreetAccount) Traffic Acquisition Cost (TAC): $14.87 billion vs. $14.82 billion (by StreetAccount)
Alphabet reported solid momentum in its cloud business, thanks to strong demand for artificial intelligence. The company also announced an expected increase in capital expenditures for fiscal year 2025.
“Due to growth across our business and demand from our cloud customers, we expect 2025 capital expenditures to be in the range of $91 billion to $93 billion,” the company said in an earnings call Wednesday.
Earlier this year, the company raised its capital spending forecast to $85 billion from $75 billion. Most of that will go to technology infrastructure such as data centers.
The latest financial results show the company is seeing increasing demand for its AI services, primarily in its cloud division. It also shows that the company continues to spend more money trying to build out more infrastructure to address the backlog of customer requests.
“We continue to drive strong growth in new business, and Google Cloud accelerated and ended the quarter with a $155 billion backlog,” CEO Sundar Pichai said in the earnings call.
The company reported cloud revenue of $15.15 billion, an increase of 35% year over year.
Alphabet, which reported a 32% increase in cloud revenue last quarter, is in line with its mega-cap competitors. microsoft announced its financial results on Wednesday, posting a 40% revenue increase in its Azure cloud business.
Google’s search business generated $56.56 billion in revenue, up 15% year over year.
Alphabet’s net income increased to $34.97 billion, or $2.87 per share, from $26.3 billion, or $2.12 per share, in the year-ago period. In September, Google was slapped with a $3.45 billion antitrust fine by European Union regulators for anticompetitive conduct in its lucrative advertising technology business. This penalty affected reported net income.
YouTube’s ad revenue was $10.26 billion, exceeding Wall Street expectations. Alphabet reported overall ad revenue of $74.18 billion, up from $65.85 billion last year.
Other Bets, which includes the company’s life sciences division Verily and autonomous vehicle division Waymo, reported revenue of $344 million in the quarter. This is lower than the $388 million in the same period last year.
Alphabet reported a loss of $1.42 billion on other bets, compared to a loss of $1.12 billion a year earlier.
Google’s parent company’s stock is up 45% since the beginning of the year.
Alphabet’s daily stock price chart.
