In Q3 2024, Google's revenue increased and exceeded expectations

Google parent Alphabet beat analysts' expectations in the third quarter with better-than-expected profit and revenue. The company's revenue came in at $88.27 billion, beating LSEG's estimate of $86.3 billion, and earnings per share came in at $2.12, missing the consensus estimate of $1.85. The biggest contributor to this success was Google Cloud, which brought in $11.35 billion in revenue, up 35% year over year. This significant growth is due to the expansion of the range of artificial intelligence (AI) solutions for corporate customers.

Alphabet's success in the third quarter was also bolstered by its advertising business, including revenue from YouTube. This platform brought in $8.92 billion, slightly exceeding StreetAccount analysts' expectations ($8.89 billion). Google's core advertising business, which generated $49.4 billion in revenue, grew 12.3% year over year and remains the company's largest source of revenue. As the company's Chief Financial Officer Anat Ashkenazi noted, this sector maintains high growth rates and is critical to Alphabet's overall success.

Against the backdrop of high demand for cloud solutions, Google Cloud not only gained new customers, but also showed rapid growth, which was made possible by the active implementation of AB tools. The company emphasizes that the full range of Alphabet's AI solutions are now used by billions of users around the world, which creates a "closed loop" that promotes the further adoption of AI and improves the quality of services. The company's chief executive officer, Sundar Pichaim, in his turn said that the strategic development of cloud products gives the company a strong competitive advantage.

Advertising business

Alphabet's ad revenue came in at $65.85 billion, up from $59.65 billion a year earlier, though growth slowed slightly from previous quarters. However, advertising on YouTube has exceeded analysts' expectations, showing steady growth and facing competition from platforms such as Netflix, TikTok and Amazon. According to Philip Schindler, the company's general director of business affairs, the introduction of the Gemini AB model has improved YouTube's video recommendation algorithms, making the recommended content more personalized and relevant to the given user.

The Google Workspace and Google Cloud segments continue to show steady growth. According to Anat Ashkenazi, Google Cloud's growth rate is outpacing the overall performance of the cloud division. Workspace, in turn, shows the high demand for cloud computing among customers.

The Other Bets division, which includes projects Verily (medical technology) and Waymo (self-driving cars), posted revenue of $388 million, up significantly from last year's figure of $297 million. A major step for Waymo was securing $5.6 billion in funding, which will allow the company to expand its robotaxi services in cities such as Los Angeles, San Francisco and Phoenix.

Google Lens, which uses the power of the camera to power visual search queries, is used more than 20 billion times a month, making it one of Alphabet's fastest-growing solutions. The platform is heavily used for shopping and has become an important part of the search ecosystem, strengthening Alphabet's position in the e-commerce market.