On 30th October 2020, Alphabet, the parent company of Google, announced its quarterly earnings (Q3) report.
The company generated total revenue of $446.2 billion with a net income of $11.2 billion. Experts predicted that Alphabet will earn total revenue of $442.84 billion. However, the company’s market share grew up to 8.5%.
Let’s see how this happened.
YouTube revenue increased from $3.8 billion to $5.0 billion in the Q3 report. Previously, forecasters predicted that YouTube can generate a total of $4.52 billion in the latest quarter.
However, YouTube surpassed that by 0.48 billion. The increased profit is due to the strong growth of YouTube ads.
Google Cloud Revenue:
It managed to make $3.44 billion from $2.4 billion in the Q3 report. It rose by 1% from the previous quarterly earnings. The success of Google Cloud is an achievement for the company as many deals have been made for these categories.
It includes cloud computing, software, and other services provided by Google to its users worldwide.
Other Bets Revenue:
Alphabet has many other subsidiaries that include Calico, Waymo, Wings, and many others. These are collectively known as XXVI Holdings, Inc. which we like to call ‘Other Bets’.
These subsidiaries don’t provide any major profit to the company but are a source of negative income. The company lost nearly $1.1 billion in the quarter that is higher than last year.
We can see that the financial issues of these subsidiaries are still somewhat not promising.
The company made most of its revenue from Google with up to 99.66%. The majority of revenue that comes from Google is due to its ‘Search product’.
Sundar Pichai, the CEO of Google also said, ‘This year, including this quarter, showed how valuable Google’s founding product, search, has been to people.”
Google also earned from its other revenue that includes its hardware such as Pixel phones, Pixel books, Chrome books, etc.
The total income was seen around $5.48 billion this year from $4.05 billion compared to last year.
This increase can be due to the lockdown period when users were at home and used these gadgets for entertainment purposes.
In conclusion, we can say that the Alphabet is doing a profitable business. The company has nearly a free cash flow of $11.6 billion that is appreciable.