Alphabet Inc (GOOG) Q3 2024 Earnings Call Highlights: Strong Revenue Growth and AI Advancements

GuruFocus News
4 min read

In This Article:

  • Consolidated Revenue: Increased by 15% year-over-year, or 16% in constant currency.

  • Google Services Revenue: $76.5 billion, up 13% year-over-year.

  • Google Search and Other Advertising Revenue: $49.4 billion, up 12% year-over-year.

  • YouTube Advertising Revenue: $8.9 billion, up 12% year-over-year.

  • Google Cloud Revenue: $11.4 billion, up 35% year-over-year.

  • Operating Income: Increased 34% to $28.5 billion.

  • Operating Margin: Increased to 32%.

  • Net Income: Increased 34% to $26.3 billion.

  • Earnings Per Share (EPS): Increased 37% to $2.12.

  • Free Cash Flow: $17.6 billion for the third quarter.

  • Cash and Marketable Securities: $93 billion at the end of the quarter.

  • Google Cloud Operating Income: $1.9 billion, with an operating margin of 17%.

  • Other Bets Revenue: $388 million with an operating loss of $1.1 billion.

  • Capital Expenditures (CapEx): $13 billion, primarily in technical infrastructure.

  • Share Repurchases and Dividends: $15.3 billion in share repurchases and $2.5 billion in dividend payments.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Alphabet Inc (NASDAQ:GOOG) reported a 15% increase in consolidated revenue, with Google Cloud revenue growing by 35% year-over-year.

  • The company has made significant advancements in AI, with the Gemini models being integrated across all major products and platforms, reaching over 1 billion users.

  • YouTube's combined ad and subscription revenue surpassed $50 billion over the past four quarters, driven by strong growth in YouTube TV, NFL Sunday Ticket, and YouTube Music Premium.

  • Alphabet Inc (NASDAQ:GOOG) is making substantial investments in clean energy, including a corporate agreement to purchase nuclear energy, supporting its commitment to sustainability.

  • The company is seeing strong engagement and increased search usage with the rollout of AI Overviews to over 100 new countries and territories.

Negative Points

  • Network advertising revenue declined by 2% year-over-year, indicating challenges in this segment.

  • The company faces potential legal challenges from the DOJ, which could impact its search agreements with partners like Apple.

  • Alphabet Inc (NASDAQ:GOOG) is experiencing increased costs, with total cost of revenue up by 10% and operating expenses rising by 5%.

  • There is a headwind to year-over-year growth in subscription platforms and devices revenue due to the pull forward of Made by Google launches.

  • The company is facing increased competition in the AI space, with a need to continuously innovate to maintain its leadership position.

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