Google Q3: Record profit; AI & cloud fuel growth, says Pichai
Google Inc's parent company Alphabet posted a record revenue in the third quarter of 2024, beating Wall Street estimates, on growth in its digital ad business and cloud services. The company achieved a revenue of $88.3 billion in Q3 2024, a 15% growth compared to the same period last year, and above the average market expectations of $86.30 billion. The company's net income increased 34% to $26.3 billion from $19.6 billion in the year-ago period and earnings per share (EPS) increased 37% to $2.12 from $1.55 in the year-ago period.
The average market expectations were $22.9 billion profit and $1.84 EPS. Google's cloud revenues increased 35% to $11.4 billion led by accelerated growth in Google Cloud Platform (GCP) across AI Infrastructure, Generative AI Solutions, and core GCP products.
Google Services revenue grew 13% to $76.5 billion, led by strength across Google Search & other, Google subscriptions, platforms, and devices, and YouTube ads.
Total operating income for the quarter increased 34%, and operating margin expanded by 4.5 percentage points to 32%.
Google CEO Sundar Pichai says the company's momentum is extraordinary. "Our long-term focus and investment in AI are paying off, with consumers and partners benefiting from our AI tools."
On October 29, 2024, Alphabet announced a cash dividend of $0.20 per share that will be paid on December 16, 2024, to stockholders of record as of December 9, 2024, on each of the company’s Class A, Class B, and Class C shares. Google's dividend payments to stockholders of Class A, Class B, and Class C shares were $1.2 billion, $173 million, and $1.1 billion, respectively, totalling $2.5 billion for the three months ended September 30, 2024.
Key highlights from Pichai's Q3 remarks:
Gemini API calls, token volume, consumer usage, business adoption -- all 7 products and platforms with 2B+ monthly users use Gemini models, including the newest 2B-user product, Google Maps, says Pichai.
Recent AI advancements, including AI Overviews, Circle to Search, and new Lens features, are expanding what people can search for and how they search for it. "This leads to people coming to Search more often, driving additional search queries," says the Google CEO.
For the first time ever, says Pichai, Google's combined ad and subscription revenue over the past 4 quarters surpassed $50B. "And our Cloud business has great momentum, generating Q3 revenues of $11.4B, up 35% over last year."
Pichai says the tech giant continues to invest in state-of-the-art infrastructure to support AI efforts, including important work inside its data centres to drive efficiencies, while making significant hardware and model improvements.
On Waymo, Google says it achieved 1 million fully autonomous miles and 1,50,000 paid rides/week. "Plus partnerships with Uber + Hyundai, 6th-gen Waymo Driver, growing commercial opportunity."