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Google’s Earnings Smash Expectations

Google bucks the odds again, somehow managing to beat the highest of all expectations. Their latest earnings report is in, and it’s a nice one. The short:

  • Revenue: $4.23 billion, up 9% over the last quarter and 57% over the third quarter of last year.
  • GAAP operating income: $1.32 billion, 31% of revenue, up from $1.1 billion and 29% the previous quarter. Non GAAP: $1.52 billion and 36%, up from $1.35 and 35%.
  • GAAP net income: $1.07 billion, up from $925 million. Non-GAAP: $1.24 billion, up from $1.12.
  • GAAP earnings per share: $3.38. Non-GAAP: $3.91
  • Traffic Acquisition Costs: $1.22 billion, 29% of ad revenue.
  • Stock-based compensation: $198 million, reduced from $242 million.
  • Google Site revenue: $2.73 billion, 65% of total, a 10% increase.
  • Google Network (AdSense) revenue: $1.45 billion, 34% of total, an 8% increase.
  • Paid clicks: Up 5%.
  • AdSense payouts: $1.22 billion.
  • Other cost of revenue (data centers and credit card processing): $441 million, up from $412.
  • Income tax rate: 27.3%, up from 25.5%.
  • Cash flow: $1.63 billion, up from $1.23 billion.
  • Cash on hand: $13.1 billion.
  • Employees: 15,916, hiring 2,130 new Googlers in 3 months.
  • Non-advertising revenue: $41.9 million, up from $26.7, but still just 1% of total revenue.

So, great numbers, other trends remain the same. AdSense growth is slowing, becoming a less important part of Google. Google keeps hiring (overhiring, maybe). Non-advertising revenue is non-existent.

The stock market is reacting positively. Shares are up mildly in after-hours trading, up a total of $9.52 on the day (about 1.5%). Not a great reaction (maybe they’re bored of Google?), but the stock is flying so high these days, it doesn’t have much of where to go. Google market cap is almost exactly $200 billion right now, an all-time high.

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October 18th, 2007 Posted by Nathan Weinberg | Stock Market | 2 comments

2 Comments »

  1. Google Network (AdSense) revenue: $1.45 billion
    AdSense payouts: $1.22 billion.

    Wow … Is it that Google is only earning ~15% from every click in AdSense? 85% is a huge proportion!

    Comment by Keith | October 23, 2007

  2. Isn’t that nice of them, sharing so much with the rest of us?

    Comment by Nathan Weinberg | October 24, 2007

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