Google (Alphabet) Q3 2021 Earnings Report Recap

GOOGL beat on earnings and on revenue

Key Takeaways

  • Google Cloud revenue missed analysts' expectations.
  • Google Cloud is one of Alphabet's primary business segments. It provides developers with a cloud platform for building, testing, and deploying applications.
  • Google said that its cloud services are helping organizations collaborate and remain secure amid ongoing digital transformation and shift to hybrid work.
Google (Alphabet) Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Beat $27.99 $23.12
Revenue Beat $65.1B $63.4B
Google Cloud Revenue Miss $5.0B $5.1B

Source: Predictions based on analysts' consensus from Visible Alpha

Google (Alphabet) Financial Results: Analysis

Alphabet Inc. (GOOGL, GOOG), parent company of Google, on Oct. 26 reported Q3 FY 2021 earnings and revenue that surpassed analyst expectations. Earnings per share (EPS) came in well above what analysts were forecasting, rising 70.7% year over year (YOY). Revenue also beat analyst estimates by a healthy margin, up 41.0% compared to the year-ago quarter. Google Cloud revenue came in at $5.0 billion, exceeding expectations. The company's shares were down more than 2% in extended trading. Over the past year, Alphabet's shares have provided a total return of 75.9%, well above the S&P 500's total return of 34.5%.

Google Cloud Revenue

Google Cloud revenue grew 44.9%, slowing from the previous quarter's pace. Google Cloud is one of the tech giant's primary business segments, the other being Google Services. The cloud segment provides developers with a highly scalable and reliable platform for building, testing, and deploying applications. It also offers workspace collaboration tools, including apps like Gmail, Docs, Drive, Calendar, Meet, and more. As of the end of the second quarter of 2021, Google Cloud had an estimated 8% of the global cloud market, ranking it third behind Microsoft Corporation's (MSFT) Azure and top-ranked, Inc.'s (AMZN) Amazon Web Services.

CEO Sundar Pichai said that the Google's cloud services were helping organizations collaborate and remain secure amid the ongoing shift toward online commerce and hybrid work.

Google (Alphabet) Earnings Call Recap

Ruth Porat, Alphabet’s chief financial officer, said on the company's earnings call that the Apple's new privacy features had a “modest impact on YouTube revenues.” Like other social medic companies, Google is grappling with privacy changes that Apple made to iOS 14 earlier this year.  Google is more protected than companies such as Facebook Inc. (FB) because Google owns the Android operating system.

Alphabet's next earnings report (for Q4 FY 2021) is estimated to be released on Feb. 2, 2022.

Article Sources
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