Alphabet Beats on Both the Top and Bottom Line in the Third Quarter

Google parent company Alphabet reported its third quarter financial results this week that beat on both the top and bottom line.

While shares were little changed after the report on Tuesday, third quarter results topped what analysts had expected.

For the third quarter Alphabet reported earnings per share of $27.99, versus only $23.48 that was expected per Refinitiv.

Revenue at $65.12 billion was also ahead of the $63.34 billion according to Refinitiv estimates.

YouTube advertising revenue came in at $7.20 billion, slightly below the $7.4 billion expected. Google Cloud revenue at $4.99 billion was also below the $5.07 billion expected.

Traffic acquisition costs (TAC) came in at $11.50 vs. $11.16 billion expected.

Alphabet CFO Porat says ad revenue was driven by retail while Ruth Porat, Alphabet’s finance chief, said on the call with analysts that the new privacy features had a “modest impact on YouTube revenues.”

Porat added that “focusing on privacy has been core to what we’ve been doing consistently.” She also said the company added 6,000 employees in the third quarter and expects “robust” headcount growth in the fourth quarter.

Philipp Schindler, Google’s chief business officer, said retail was the largest contributor to year-over-year ad growth. Media and finance spending was also significant.

“We continue to see a lot of unevenness,” Schindler said. “It’s clear that uncertainty is the new normal.”

Alphabet also reported a gain on investments of $188 million in the quarter, up from a gain of $26 million a year earlier.

Alphabet shares are up 58% this year so far.

Disclaimer: We have no position in any of the companies mentioned and have not been compensated for this article.