Google’s Alphabet Inc Delivers 15% Revenue Growth To $38bn
Google’s parent company Alphabet Inc recorded 15% growth in the third quarter to $38 billion after a slight decline in the previous period, bolstered by digital ad spend.
While the growth was slower than the same period in 2018, it marked a comeback for the search engine giant after the last quarter’s first-ever dip in revenue.
The earnings were higher than forecasted after analysts estimated sales of around $34.5 billion for quarter three.
YouTube, which is the fastest growing division of Google’s ad business, delivered $5 billion in revenue, a 32% rise from last year.
Around 90% of Google’s entire revenue stream comes from advertising, most of it linked to search results. Q2 suffered in this department after some of Google’s biggest clients in the travel and tourism industries halted spending.
The second quarter revenue decline was Google’s first ever quarter without growth in its two-decade history.
But as consumers settled into lockdown, ad spending in the e-commerce industry boomed and users spent more time watching videos on YouTube.
“Regarding revenue, in the third quarter, we benefited from a broad-based improvement in advertisers spend across all geographies and nearly all verticals,” Chief Financial Officer Ruth Porat said on a conference call. “This is reflected in both search results as well as the rebound in brand advertising spend on YouTube.”
“While we are pleased with our performance in the third quarter, there’s obviously uncertainty in the external environment,” Porat added.
Google’s Cloud revenue was also up by 45% to $3.4 billion, with analysts expecting the category to continue to grow as demand intensifies for collaboration software due to remote working habits.
Alphabet Inc shares surged during the earnings media call, rising to $16.40 per share, compared to $10.12 a share during the same period last year.