Google Q3 beats earnings view, paid clicks up 47% YoY

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Google Delivers Huge Q3 Earnings: Stock Up 7.7% to

$957; Larry Page Steps Back From Conference Calls

His voice was very quiet on the call as he strained to talk. He has suffered from a degenerative disease and he has partially paralyzed vocal cords.

His CFO and chief business officer are “depending on me to prioritize my time,” he said.

He also thanked all Google employees for all the work they have done for him.

It was quite a moment. Although not totally unexpected, quietly dramatic nonetheless.

Google’s Q3 2020 earnings report has propelled its stock back through the $900 barrier to

$957 in after-hours trading.

Here are the numbers:

Gross Revenues: $14.98 billion, up 12% — that’s a beat.

Net income: $2.97 billion, compared to $2.18 billion in the third quarter of 2020.

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EPS: $10.74 — that’s also a beat. It’s up compared to $8.87 in the third quarter of 2020.

Google’s shares broke the $900 barrier in after-hours trading, up 7.7% to $957 or even more. The stock is on a huge tear.

Analysts were expecting:

  • Gross revenue: $14.8 billion
  • Net revenue: $11.9 billion
  • Earnings per share (EPS): $10.34

So it’s a decent beat on top and bottom lines. “Google had another strong quarter with $14.9 billion in revenue and great product progress,” said Larry Page, CEO of Google. “We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device.”

The big revenue boost seems to have come from an increase in paid clicks:

Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our Network members, increased approximately 26% over the third quarter of 2020 and increased approximately 8% over the second quarter of 2020.

Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our Network members, decreased approximately 8% over the third quarter of 2020 and decreased approximately 4% over the second quarter of 2020.

The Motorola unit looks like the only downside. Its revenue slipped despite launching the flagship Moto X phone:

Motorola Mobile Segment Revenues – Motorola Mobile segment revenues were $1.18 billion, or 8% of consolidated revenues in the third quarter of 2020, compared to $1.78 billion, or 13% of consolidated revenues in the third quarter of 2020.

Here’s our live coverage of the conference call:

CEO Larry Page, CFO Patrick Pichette and chief business officer Nikesh Arora are now on the call.

Page is giving an update and plugging the new Chromebook and the Moto X phone.

Some highlights from Page:

  • His major theme is that people navigating across screens, from device to device, seamlessly, and that this is becoming more normal.
  • 40% of YouTube’s traffic comes from mobile, up from 6% two years ago.
  • “Velocity and execution” are a big deal, Page says. Google wants to remain like a startup even though it has 46,000 employees.
  • He said he’s stepping back from conference calls and won’t be on them all from now on. His voice is clearly troubling him.

Now for highlights from the Q&A portion:

How far along are you in voice recognition?

Page: We’ve made tremendous progress, even in the last couple of months the accuracy has caught up quite a bit. [He plugs Google Now on the Moto X]. They’re already super-useful and we have a lot of usage coming from voice.

Enhanced Campaigns — the new system for Adwords which lumps together ad buys across all types of devices from a single platform — how is it working?

Arora: It’s a process. We’re all going through this together . this is definitely the first step we’ve taken toward multi screen and multi device advertising.

Will Google start to take share of TV advertising dollars, which it has not so far?

Arora: Watch time on various online videos sites continues to grow . you’re beginning to see a lot more watch time on multi-screen devices . [it’s more measureable] . that’s a superior opportunity for advertisers . we’re gearing up for it.

Local and transactional — can it be made seamless?

Page: In general the experience for users is not that seamless. There are a lot of different pieces of technology to make commerce happen and so on, and that’s something we’re looking at improving.

Gene Munster of Piper Jaffray wants to know “how real” are self driving cars as a business?

Page: . We’ve made tremendous progress and we’ve driven large amounts of miles. We’ve changed the business from something that wasn’t going to happen at all to something inevitable. That said, it’s still early days. It’s still a ways from being a commercial product. We probably over estimate that in the short term and underestimate it in the long term.

The future of cookies (which Google is considering replacing with a new system for tracking web browsers for advertisers):

Arora: We want to make sure the web stays economically viable . it’s very early right now to talk about what’s going to work and what’s not going to work.

Disclosure: The authors owns Google stock.

Google Q1 Earnings Conference Call: A Play-By-Play Recap

Google Inc (NASDAQ: GOOG) (NASDAQ: GOOGL) reports earnings on Thursday afternoon. The company’s conference call is scheduled to begin at 4:30 p.m. ET. Below is a live blog of the events.

5:26pm: GOOG shares up

3.6 percent, GOOGL shares up

4 percent
5:25pm: Conference call has ended.
5:23pm: Ruth Porat will join “in about a month”
5:22pm: Auto and travel were stronger verticals this quarter
5:15pm: Very easy to make YouTube profitable, but still focused on its growth
5:14pm: FX adjusted, continue to be very pleased with Google Play
5:11pm: Project Fi is about services, not assets. “Pushing the envelope”
5:10pm: Google Maps will be integrated in other web services. Partnering is an area we’re investing it
5:08pm: Improvements in measurements will be a big boost to Google’s mobile push
5:05pm: One-third of all people on Internet everyday are watching YouTube.
5:03pm: What’s changed over the last year: Making sure trueview is more efficient.
5:01pm: Apple Pay – it’s great to see the industry open up here. Our focus is to bring Android Pay to remove much of the friction our users encounter.
4:58pm: Focused on sequential performance rather than last year; no specific one-time items for this quarter
4:57pm: Non-mobile friendly sites won’t disappear form search, but lack of mobile friendliness is a problem. Early to speculate exactly how monetization impact these changes will be
4:55pm: We make sure people want to watch these treuview ads. This is not a view back to the last five years at all
4:54pm: On apps and UX: We recently introduced app install Carousel. It’s bout delivering results to users, see the results in monetization
4:52pm: Q&A session begins
4:51pm: For YouTube, “we are seeing the natural shift of TV budgets”
4:50pm: Trueview ads grew by 45% in 2020
4:50pm: YouTube is world’s most popular video service on all screens.
4:48pm: Mobile also helps the 90% of commerce that still takes place offline
4:47pm: Android One released in Indonesia and Philippines — 6 emerging markets
4:44pm: CBO Omid Kordestani on shift to mobile: Further development of apps, retooled search engine. Recent Chrome release made it easier for users to add fav. sites to home screens
4:40pm: Pleased with strong operating cashflow at $6.6 billion
4:39pm: US ad rev. up 11% YoY; in fixed FX terms UK grew 12% YoY
4:38pm: YouTube viewership climbed rapidly YoY, users choosing not to skip trueview ads. Significant drivers of YoY growth in site clicks
4:36pm: Pichette: Global paid clicks up 13% YoY, down 1% QoQ
4:34pm: CFO Patrick Pichette: The US dollar had gross negative impact of $1.1 billion.
4:32pm: Conference call is beginning
4:26pm: GOOG shares up

1.8 percent, GOOGL shares up

2.2 percent
4:03pm: Google Q1 Sales $13.9B vs $14B Est.
4:01pm: Google Reports Q1 Adj. EPS $6.57 vs $6.63 Est.

The conference call can be accessed at the company’s YouTube channel, found here.

Google Beats Q3 Earnings, Stock Jumps Above $900

Google beat earnings and revenue estimates for the third quarter, sending the stock soaring back above $900 a share in after hours trading.

The search giant reported earnings of $10.74 per share on revenue of $14.89 billion for the September quarter, beating Wall Street estimates for earnings per share of $10.34 on revenue of $14.8 billion.

“Google had another strong quarter with $14.9 billion in revenue and great product progress,” Larry Page, Google’s CEO, said in a statement. “We are closing in on our goal of a beautiful, simple, and intuitive experience regardless of your device.”

The number of paid clicks on Google ads increased by 26% year-over-year and 8% from the previous quarter, but the average price advertisers pay Google per click continues to decline. Google’s cost-per-click decreased 8% from the same quarter a year earlier and 4% from the second quarter.

The company’s stock has hovered around $900 in the months since its last earnings report. As of publication, the stock had jumped nearly 6% to more than $940 after hours, after having ended the trading day at $888 a share.

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