Google parent Alphabet posts double-digit growth numbers

We take a look at the numbers behind Google…

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Chances are most Australians are familiar with Google, the world-famous search engine and now name behind a mind-boggling suite of different products. But most people don’t know that Google is itself owned by the parent company Alphabet Inc (NASDAQ: GOOG)(NASDAQ: GOOGL).

So if you want to have a look at Google’s business performance, you actually have to check out Alphabet. Luckily, we can do just that today. Alphabet has just reported its quarterly earnings for the quarter ending 30 September (Q3). So let’s take a look.

It’s been an unquestionably strong quarter for Alphabet. The company posted revenues of US$65.12 billion for the 3 month period, a whopping 41% increase from the US$46.17 billion the company posted in the same quarter last year.

Operating income came in at US$21.03 billion, an 87.56% rise from the US$11.21 billion over the same period last year. Net income was a little more muted at US$18.94 billion, but still a 68.34% rise from last year’s quarterly figure of US$11.25 billion.

Diluted earnings per share (EPS) also rose strongly. Alphabet brought in US$16.40 in EPS over Q3 2020 but this has risen by 70.67% to US$27.99 per share for Q3 2021.

Alphabet firing on all cylinders?

Breaking Alphabet’s revenue numbers down, we see some interesting trends. Alphabet’s ‘Google Search and other’ category brought in US$37.93 billion, a 44% increase year on year. Google’s YouTube platform comes under this category, with YouTube revenues rising 43% to US$7.21 billion.

Meanwhile, the Google loud division, which competes with Amazon.com Inc‘s (NASDAQ: AMZN) AWS and Microsoft Corporation‘s (NASDAQ: MSFT) Azure, also posted strong growth numbers. Google Cloud brought in US$4.99 billion in revenues over the quarter, up 44.89% year over year.

Similarly, we saw healthy growth numbers with the Google Services division too. Services brought in US$59.88 billion over the 3 months, up 40.66% from last year’s Q3 figure of US$42.57 billion.

Alphabet’s ‘Other Bets’ division is still a relative minnow though. Other Bets revenue was at US$182 million from the quarter, up 2.25% from last year’s quarterly revenue of US$178 million.

Alphabet also informed investors that over the quarter, the company undertook US$12.6 billion worth of share buybacks, with 4.6 million shares (500,000 Class A shares and 4.1 million Class C shares) retired over the period.

The Alphabet share price reacted erratically to these earnings in after-hours trading on the US markets early this morning (our time). Alphabet’s Class C shares (GOOG) closed at US$2,793.44 this morning and at US$2,783 in after-hours trading, down 0.37%. Class A shares (GOOGL) closed at US$2,786.17 and at US$2,760.46 after hours, down 0.92%.

At these share prices, Alphabet has a market capitalisation of… wait for it… US$1.86 trillion (with a T).

Should you invest $1,000 in Alphabet right now?

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen owns shares of Alphabet (A shares). The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool Australia has recommended Alphabet (A shares) and Alphabet (C shares). The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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