Q3 2019 revenue of $40.49 billion
Alphabet today announced Q3 2019 earnings with $40.49 billion in revenue. These numbers range from July to September, and did not entirely meet analyst expectations. Revenue is up 20% from $33.74 billion in Q3 2018, with operating income at $9.17 billion and net income of $7.06 billion for this quarter. For comparison, Alphabet reported $38.94 billion in revenue and a $9.18 billion in net income last quarter. Currently down 2.5% in after-hours trading, Google did meet revenue expectations, but not earnings per share.
“Google other revenues” — which includes hardware, Play Store, and Google Cloud enterprise efforts — reported $6.42 billion, compared to $4.6 billion the same quarter last year. The closely-watched “Other Bets” continues to lose money, but is slowly increasing revenue. It reported $155 million revenue primarily generated by Verily and Fiber, with operating loss slightly down to $941 million from $989 million in the previous quarter. Alphabet will hold an earnings call with investors and members of the press to further break down numbers from the Q3 2019 earnings release. You can follow along via the live stream below and we’ll have coverage of any notable tidbits the company reveals.
Google CEO Sundar Pichai reiterated those remarks, saying that the entire industry was facing “year-on-year headwinds.” However, he also said that Google wasn’t looking to call it quits. We are still in the early days, but our commitment is very strong,” Pichai said. “We view this as a hugely important opportunity.” Porat did call out Home hardware as a segment that has been performing better and said that the company would have hardware announcements at its Google I/O developer conference next week. The company is expected to announce a more affordable version of its Pixel phones and possibly a second smart display device soon.
Google’s “other revenue,” which includes hardware like its Pixel phones and cloud products, came in at $6.43 billion, surpassing expectations of $6.32 billion, according to Factset. The company earned $6.18 billion last quarter and $4.64 billion in last year’s Q3. In a call with CNBC’s Josh Lipton, CFO Ruth Porat declined to comment on reports today that the company has made a bid to buy fitness-tracking device company Fitbit. An acquisition of that nature would make Alphabet a player in the wearable fitness tracking space, competing against the likes of Apple. Alphabet said its revenue from “other bets,” which includes its subsidiaries outside of Google like the self-driving car company Waymo, came in at $155 million, which was more than last year’s Q3 $146 million in the year-ago quarter. It lost $941 million during the quarter, up from a loss of $727 million a year ago.
“We’ve always stressed that this is a long-term opportunity. We are pleased with the ongoing progress and each quarter we try and give you a sense of the steps along the way,” Porat told CNBC about Waymo. “Safety is the most important element when it comes to Waymo, so we are building out the business slowly and in an iterative fashion, and we are pleased about the ongoing progress there.” Capital expenditures increased from $5.28 billion in the year-ago quarter to $6.73 billion as the company expands in Silicon Valley and other areas. In July, Google CEO Sundar Pichai said the company plans to triple the sales force in cloud, and called it a key growth driver for Alphabet, revealing that it pulls in $8 billion annually. CEO Thomas Kurian has hired more than a dozen top tier executives from competing cloud companies since he took the reins earlier this year. Google Cloud currently stands in a distant third as it competes against stronger cloud market leaders Amazon and Microsoft. Porat said headcount grew “unusually high” in the third quarter as the company added 6,450 new employees. She explained the high rate came from Cloud’s hiring strategy and was also due to new college graduates. Pichai said on the call that the Cloud unit could become the greatest benefactor of its recently-announced quantum computing milestone.