Google Parents alphabet It reported third-quarter earnings that beat top and bottom lines with strong revenue growth from the company's cloud unit.
The company's shares rose 4% in after-hours trading.
Here are the results:
Earnings per share: $2.12 vs. $1.85 expected by LSEG Revenue: $88.27 billion vs. $86.30 billion expected by LSEG
Here are other numbers Wall Street has been watching:
YouTube ad revenue: $8.92 billion vs. $8.89 billion, according to StreetAccount. Google Cloud revenue: $11.35 billion vs. $10.88 billion, according to StreetAccountTraffic Acquisition Costs (TAC): $13.72 billion vs. $13.53 billion, according to StreetAccount.
Alphabet's revenue rose 15% year over year, stronger than the same quarter last year.
The company reported a whopping $11.35 billion in cloud revenue, up nearly 35% from last year's $8.41 billion. The company attributed its strong cloud results to its AI offerings, which include subscriptions for enterprise customers.
Alphabet CEO Sundar Pichai opened his call with investors saying that the company's “full suite” of AI products are now running at scale and used by billions of Google users, “creating a virtuous cycle.”
The search company's strong quarter kicks off a big week of earnings for big tech companies. Meta and Microsoft report on Wednesday followed by Apple and Amazon on Thursday.
The company reported advertising revenue of $65.85 billion. That was up from $59.65 billion a year ago, showing that Google's advertising business is continuing to grow, albeit at a slower pace than in the second quarter.
YouTube ad revenue beat analyst expectations, showing better growth than last quarter. The Google-owned company is facing increasing pressure from other advertiser options like Netflix, TikTok and Amazon.
AI is improving YouTube's recommendations, Philip Schindler, chief business officer, said during the call with investors. The company's Gemini AI language model has given YouTube the ability to “recommend more relevant, fresher and personalized content to the viewer.”
Alphabet's net income rose to $26.3 billion, or $2.12 per share, compared to $19.7 billion, or $1.55 per share, in the same quarter last year.
Other bets, which include the company's life sciences unit Verily and its self-driving car unit Waymo, posted revenue of $388 million in the third quarter. This is up from $297 million a year ago.
Last week, Waymo closed a $5.6 billion funding round to expand its robotics service in Los Angeles, San Francisco, Phoenix and to more cities.
Google Lens, the company's image recognition product that uses mobile cameras and images, is now used for more than 20 billion visual searches a month, Pichai said. He added that it is one of the fastest growing search products and is frequently used for shopping.
Alphabet's third quarter was full of external and internal changes, including at its top positions and most important businesses.
Earlier this month, the company replaced Prabhakar Raghavan, the company's head of search and advertising since 2018, with Nick Fox, a longtime executive known for his role in the Google Assistant unit. Additionally, the team working on Gemini, which includes the company's direct-to-consumer AI products, will join Google DeepMind under the leadership of Demis Hassabis.
The company announced Tuesday that it is evaluating how this reorganization will impact its segment operating results.
