Alphabet Tops Q3 Estimates as Ad Revenue Surges 43 Percent
Alphabet beats Wall Street expectations for third-quarter earnings and revenue, driven by a massive 43 percent jump in advertising sales. The company also demonstrates resilience against Apple's privacy changes while Google Cloud losses continue to narrow.
Alphabet reports third-quarter profit and revenue that exceed analysts' estimates, with earnings per share reaching $27.99 compared to the expected $23.48. Total revenue climbs to $65.12 billion, easily beating the $63.34 billion consensus forecast. The company's stock shows little movement immediately following the strong report, though shares remain up 58 percent for the year.
Google's advertising revenue surges 43 percent to $53.13 billion, driven significantly by retail spending along with strong contributions from the media and finance sectors. YouTube ad revenue reaches $7.21 billion, representing substantial year-over-year growth even as Alphabet navigates the privacy changes Apple implements in iOS 14. Chief Business Officer Philipp Schindler notes that uncertainty remains the new normal as the pandemic recovery unfolds unevenly across different countries.
Google Cloud revenue grows 45 percent to $4.99 billion as the division continues its heavy investment push to compete with Amazon Web Services. The cloud unit's operating loss narrows significantly to $644 million, down from $1.21 billion in the previous year. Alphabet demonstrates relative protection from Apple's ad-tracking restrictions because of its ownership of the Android operating system, with CFO Ruth Porat describing the privacy impact on YouTube as modest.