Alphabet beats Q3 estimates with revenue up 41%

Google’s parent company Alphabet posted better-than-expected third quarter results on Tuesday, with total revenues up 41%. While Google’s ad business continues to subsidize its cloud expansion, Google Cloud brought in nearly $5 billion in Q3. 

Alphabet reported an overall net income of $18.94 billion and diluted earnings per share of $27.99. Total revenues came to $65.1 billion.

Analysts were expecting earnings of $23.47 per share on revenue of $63.45 billion. 

“Five years ago, I laid out our vision to become an AI-first company,” Alphabet and Google CEO Sundar Pichai said in a statement. “This quarter’s results show how our investments there are enabling us to build more helpful products for people and our partners. Ongoing improvements to Search, and the new Pixel 6, are great examples. And as the digital transformation and shift to hybrid work continue, our Cloud services are helping organizations collaborate and stay secure.”

As usual, Google Services revenues attributed most of Q3 sales, with $59.88 billion in revenue, and advertising continues to generate the most revenue for Google. In Q3, Google ad revenues came to $53.13 billion, compared to $37.01 billion in Q3 2020.

Google Search and other ad revenue (except for Youtube ad sales) grew to $37.93 billion in Q3. Revenue for YouTube ads rose from $5.04 billion in Q3 2020 to $7.21 billion in Q3 2021.

Google Cloud brought in $4.99 billion in sales for the third quarter of 2021. That’s up from $3.44 billion the year prior. The cloud business posted an operating loss of $644 million, compared with a loss of $1.2 billion a year prior. 

In Alphabet’s moonshot “Other bets” category, revenue came to $182 million while its operating loss reached $1.288 billion.