Google earnings and revenue blow past Wall Street’s expectations
Alphabet’s stock is soaring in early trading on Thursday.
Google is still rising, up almost 8% in premarket trading as of 5:20 a.m. ET, after it posted fiscal third-quarter earnings that surpassed Wall Street’s expectations yesterday evening, helped by big growth in its Google Cloud business.
For the quarter, the search giant’s parent company, Alphabet, reported earnings per share of $2.87, compared with FactSet analyst estimates of $2.26. Alphabet posted $102.3 billion in revenue. Analysts were expecting revenue of $99.9 billion.
Google’s parent company boosted its full-year capital expenditure outlook to between $91 billion and $93 billion, compared with its previous roughly $85 billion level.
“Better ad targeting likely contributed to a further sequential increase in growth for core Search and YouTube ads to around 15% for each segment, while Gemini’s token usage of 7 billion per minute for its API business is around that of leading frontier models such as OpenAI,” Bloomberg Intelligence analysts Mandeep Singh and Robert Biggar wrote yesterday.
Let’s break down the results for Alphabet’s many divisions:
📺 YouTube’s Q3 ad revenue rose 15% to $10.3 billion.
☁️ Google Cloud revenue for Q3 was $15.2 billion, rising 34% year over year, driven by growth in its AI Infrastructure and Generative AI Solutions division. Analysts were expecting revenue of $14.7 billion and 29.5% year-on-year revenue growth. And this business ended the quarter with $155 billion in backlog.
🔎 Google’s Search business brought in $56.6 billion, up 14.5%.
💰 Google advertising revenue was $74.2 billion, a 12.6% increase year over year.
The company is expected to release Gemini 3 in December, a major update to its flagship AI model, and Bloomberg reported that Apple may be working to use Gemini to power an AI-enhanced Siri.
Alphabet must be breathing easy after a September decision by a federal judge to not break the company up as remedy to the federal antitrust case against it, which found that the company held a monopoly in search and online advertising. Other remedies are still under consideration by the court.
In the earnings release, CEO Sundar Pichai said Alphabet’s Gemini app now has more than 650 million monthly active users.
