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Alphabet (GOOG) third quarter beats estimates: $27.8 billion, revenues up 24%

Google paid clicks were up 55 percent, but CPCs were off 18 percent.

Greg Sterling on October 26, 2017 at 4:32 pm

Google parent Alphabet announced third-quarter results. Both revenues and earnings per share beat Wall Street estimates.

The company reported roughly $27.8 billion in total revenues (up 24 percent), with Google contributing all but $302 million of that amount. Earnings per share were $9.57, which was about $1.24 higher than expected.

Advertising generated just over $24 billion in quarterly revenue. Operating income was about $7.8 billion. However, traffic acquisition costs (TAC) rose to $3.1 billion (vs. $2.6 billion a year ago). There are sure to be analyst questions about that item.

The revenue breakdown by segment:

Google properties: $19.7 billion
Google network: $4.3 billion
Google “other revenues”: $3.4 billion
Other bets: $302 billion

Paid clicks on Google properties were up 6 percent year over year and aggregate cost per click (CPC) was up 1 percent. Here’s more detail:

Aggregate paid clicks overall up 47 percent (year over year).
Paid clicks on Google properties up 55 percent.
Paid clicks on the Google Network up 10 percent.
Aggregate CPCs down 18 percent year over year (up 1 vs. last quarter).
CPCs on Google properties off 21 percent.
CPCs on Google Network were off 5 percent but flat sequentially.

Paid click growth was significant. However, CPCs were down (18 percent) from a year ago but up slightly (1 percent) from last quarter. Alphabet (GOOG) shares are up in after-hours trading.

The company says it now has more than 78,000 employees, compared with just under 70,000 a year ago. The earnings call webcast is happening now.

About The Author

Greg Sterling

Greg Sterling is a Contributing Editor at Search Engine Land. He writes a personal blog, Screenwerk, about connecting the dots between digital media and real-world consumer behavior. He is also VP of Strategy and Insights for the Local Search Association. Follow him on Twitter or find him at Google+.