Earnings per share came in at $27.99, far ahead of analysts’ consensus expectation of $23.50 and up 71% from a year ago. The revenue figure cleared Wall Street’s bar by $1 billion. When not adjusting for traffic costs, revenue shot up 41% to $65.1 billion.
YouTube ad revenue jumped 43% from the year-earlier period, reaching $7.2 billion. Search revenue climbed 44% to $37.9 billion.
The earnings release comes in the midst of a series of quarterly financial disclosures from major tech players. Netflix got things started last week, while Twitter is reporting today and Amazon and Apple are due up on Thursday.
Alphabet is approaching a market value of $2 trillion, with its shares reaching an all-time high of $2,936 over the summer. The stock closed today at $2,793.44, up a fraction. It has risen 57% in 2021 to date, the best performance by any of the five companies known by the acronym FAANG — Facebook, Amazon, Apple, Netflix and Google. Investor optimism derives from Google’s central role in the reopening of the economy as Covid restrictions have eased and vaccinations have risen.
In the earnings release, CEO Sundar Pichai said the results stemmed from a commitment made five years ago to make artificial intelligence a bedrock element of the company’s offerings. “This quarter’s results show how our investments there are enabling us to build more helpful products for people and our partners,” he said.
Apple’s changes to its algorithm have hammered companies like Snap recently, but another of Google’s advantages is that it has a significant trove of first-party data on users. That makes it less vulnerable to third-party changes to ad systems and algorithms.