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Google revenues up 13% $18.7B for Q3 on the back of mobile search and YouTube

google-dont-be-evil

Alphabet, the newly created holding company for Google, has reported consolidated revenues of $18.7 billion for the quarter ended September 30, registering a 13% increase from $16.52 billion in the same quarter last year. Note that these revenues include traffic acquisition cost of $3.57 billion for the quarter.

Alphabet also mentions that following its new reporting structure, it will be disclosing the Google business as a single segment and all other Alphabet businesses combined as Other Bets beginning in the fourth quarter of 2015.

Stock repurchase 

The board of Alphabet also authorized a stock repurchase of up to $5 billion of its class C capital stock starting in the fourth quarter. The repurchase will be executed in phases from time to time depending on market conditions through open market purchases or privately negotiated transactions.

 

Highlights

– Google owned sites vs network: The revenues from Google-owned sites was at $13.09 billion for the quarter, up 16% year-on-year (YoY) from $11.25 billion in Q3 2014, while the network revenues from partner sites (i.e. through Adsense programs) were at $3.69 billion, up 4% YoY from $3.57 billion in Q3 2014.

The total advertising revenues were at $16.78 billion for the quarter and continues to dominate Google’s overall revenues, accounting for 90% of the company’s revenues for the quarter.

Note that Google still does not provide any indication on how its mobile ad business is performing. However, the company mentioned that there was substantial growth of mobile search revenue, complemented by contributions from YouTube and Programmatic Advertising.

– Other Revenues: Other revenues for the company were at $1.89 billion for the quarter, registering a 11% increase from $1.7 billion in Q3 2014. Other revenues comprise revenues generated from content sales and hardware sales on Google Play.

– International Revenues is 53% of total revenues: Google revenues from outside of the United States were at $9.90 billion, representing 53% of its total revenues for the quarter. It’s UK revenues were at $1.86 billion for the quarter.

While Google doesn’t disclose India revenues, it had reported revenues of Rs 3,050.69 crore (around $507.35 million at applicable exchange rates) for the 12 month period ended March 31, 2014.

paid clicks Google Q3

– Paid Clicks increase by 18% YoY: Aggregate paid clicks, which includes clicks related to ads served on Google sites and AdSense partner sites, increased by around 23% YoY. On a quarter-on-quarter basis (q-o-q), the paid clicks increased by 6%. In comparison, the paid clicks had grown by 18% in the preceding quarter.

– Google owned sites vs network paid clicks: Paid clicks on Google owned sites grew by around 35% YoY, and  it increased to 7% QoQ. This includes Google Search, YouTube engagement ads like TrueView and other properties like Maps and Finance.

On the other hand, Network paid clicks decreased by 5% YoY. Network paid clicks include clicks on ads served on non-Google properties through its AdSense for Search, AdSense for Content, and AdMob businesses.

costperclick Google Q3

– Cost-Per-Click: Aggregate cost-per-click, which includes clicks related to ads served on Google sites and AdSense partner sites, however continues to slide. It dipped by 11% YoY and by 1% QoQ.

The cost-per-click for Google owned sites dipped by 16% YoY and 2% QoQ, while the network cost-per-click decreased marginally by 4% YoY, and increased by 1% QoQ.

TAC Google Q3

– Traffic Acquisition Costs: The traffic acquisition cost (TAC) which is essentially a part of Google’s revenues that it shares with its partners, was at $3.57 billion for the quarter, up from $3.38 billion in the same quarter last year. Of this, $2.51 billion was paid by Google to its network members and the remaining $1.05 billion was paid to certain distribution partners & others who directed traffic to Google’s website.

– Other Cost of Revenues: Other cost of revenues increased to $3.47 billion for this quarter, as compared to $3.35 billion in the same quarter last year. This is consisted primarily of data center operational expenses, content acquisition costs,  revenue share payments to mobile carriers and original equipment manufacturers, and hardware inventory costs.

– Total Cash: As of September 30, 2015, Google has $72.77 billion money in form of cash, cash equivalents, and marketable securities, compared to $62.16 billion as of September 3, 2014.

– Headcount: Globally, Google has 59,976 full-time employees as of September 30, 2015, as compared to 51,564 full-time employees at the end of the same quarter last year.

Other developments

– Earlier this month, launched Accelerated Mobile Pages (AMP), which supposedly speeds up load times by plugging a piece of Google code into publishers’ websites. The search giant claimed that its tools cut down load time by 15-85% in initial tests. Currently 38 publishers have joined the AMP project which includes BuzzFeed, The New York Times, The Washington Post, the Financial Times, Vox Media and the Daily Mail.

– In the same month, YouTube said that it would start serving users shopping ads based on the items shown in the videos themselves. Other than popping up during the video, the shopping ads can be found by clicking the ‘info’ icon when a relevant video is playing. The ad displays a list of sellers and prices selling the products displayed in the video.

– In September, the company launched a couple of new features for AdWords, including the ability for advertisers target customers by their email ID’s, Similar Audiences and Universal App Campaigns.

– Google also rolled out physical Google Play Gift Cards in retail outlets including Spice Hotspot, Vijay Sales, Planet M, Planet Mobile and Sangeetha Mobile across India. The cards will also be available on Snapdeal and can be paid for by cash on delivery. Currently the gift cards are available in denominations of Rs 750, Rs 1,000 and Rs 1,500.

– In July, Google+ started de-linking its profiles from other popular Google services with YouTube first in line.

Download: Earnings Release | Slides

 

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