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Google’s parent Alphabet enjoys strong rise in quarterly revenues
GOOGLE’S PARENT company reported a revenue increase of 20 per cent as the technology giant achieved “strong growth” in its latest financial results.
Alphabet said revenue for the last quarter was 40.5 billion dollars (£31.5bn), up from 33.7 billion dollars (£26.2bn) this time last year.
As usual, the Google arm of Alphabet generated the vast majority of the firm’s revenue – including 33.9 billion dollars (£26.4bn) in advertising revenue.
However, net income fell compared to the same quarter a year ago – from 9.2 billion (£7.1bn) to just over seven billion dollars (£5.4bn) and falling short of analyst expectations.
“I am extremely pleased with the progress we made across the board in the third quarter, from our recent advancements in search and quantum computing to our strong revenue growth driven by mobile search, YouTube and Cloud,” Google chief executive Sundar Pichai said.
“We’re focused on providing the most helpful services to our users and partners, and we see many opportunities ahead.”
Elsewhere in the results, Other Bets, the segment of Alphabet made up of the firm’s other projects, such as its self-driving car firm Waymo, saw losses increase to 941 million dollars (£732m).
That is up from 727 million dollars (£565m) this time last year.
Alphabet chief financial officer Ruth Porat said the firm would “continue to invest thoughtfully in talent and infrastructure to support our growth, particularly in newer areas like Cloud and machine learning”.
Google also recently updated its main hardware lines – releasing its latest Pixel 4 smartphones and Nest Mini smart speaker.
Google has increased spending in recent years on areas including cloud computing and consumer electronics that it views as essential to maintaining its industry leadership in the face of stiff competition from Amazon.com Inc and Microsoft Corp.
The new businesses are pushing Google into sales of subscriptions, devices and technology licenses. But it has had to invest in people, facilities and content.
Google is on track to hire more than 20,000 people this year, in large part to staff its newer units.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said he was not overly concerned by the spending.
“CEO Sundar Pichai can turn off the speculative spending at any time if he suddenly becomes more interested in profitability – but we suspect most investors would rather he stuck to the approach,” Mr Hyett wrote in a note.