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Google’s parent company Alphabet ignored all concerns about the decline in online advertising, with another quarter of blockbuster earnings boosted by continued strong demand for ads on YouTube and steady growth in its cloud computing business.
In the third quarter, net profit rose 68 percent to $18.94 billion, while revenue rose 41 percent to $65.12 billion, Alphabet said on Tuesday. The results exceeded analysts’ estimates of $16.2 billion in profit and $63.5 billion in sales, according to data provided by FactSet.
The strong performance underlines the value of the internet’s two primary goals: Google’s search engine and YouTube’s video platform. Businesses dependent on other social networks and advertising, Felt the sting of Apple’s policy change Google’s ad revenue remained strong as it required apps to ask users if they wanted to be tracked. Advertising revenue rose 43 percent in the quarter to $53.13 billion.
Ruth Porat, Alphabet’s chief financial officer, said in a conference call with analysts that privacy changes in Apple’s iOS mobile operating system had a “modest impact” on YouTube ads, but Google’s advertising business remains strong globally and across a wide spectrum. stated. industries.
Last week, Snap, the parent company of social media app Snapchat, said the impact of Apple’s changes was more drastic than expected. Facebook on Monday said it was experiencing “constant headwinds” from Apple’s move, even as the company’s revenue rose 35 percent in the third quarter.
Andrew Boone, a stock research analyst at JMP Securities, said that many of Google’s services are heavily insulated from the effects of Apple’s changes, as they are heavily deployed in web browsers and less so as apps are subject to Apple’s rules.
“The company appears to be immune to the impact,” he said.
While competition officials around the world are targeting Google’s businesses over antitrust concerns, Alphabet continues to grow at a dazzling pace for a company of the same size, while simultaneously increasing profitability by cutting costs. The company said it converted 32 percent of its sales to operating profit in the third quarter, up from 24 percent a year ago.
In a research note last month, RBC Capital Markets analyst Brad Erickson said Alphabet is facing more regulatory pressure, but that it’s “almost unfairly good business.” In conversations with advertisers, he noted that Google remains “the first dollar spent on any digital strategy.”
The company also reported continued growth in its Google Cloud business. Competing with cloud computing services for businesses from Amazon and Microsoft, the unit narrowed its losses to $644 million from the previous year, while revenue grew 45 percent to $4.99 billion.
Alphabet also continues to increase the size of its workforce, from 132,000 a year ago to more than 150,000 at the end of September. Alphabet said it plans to increase spending to build and renovate new offices to accommodate the growing number of employees.
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