3Q results were released after the market this morning, beating expectations plus CEO Sundar Pichai’s commentary was very positive. Shares were trading up ~8% after hours.
- Revenue of $US74.6bn for the quarter, 2.3% ahead of consensus
- Earnings Per Share (EPS) $2.12, 15% ahead of expectations.
- All areas of the business performed better than expected.
While traditional Google search remained the core driver of earnings and still grew 12% from this time last year, this is a mature business. YouTube and Google Cloud, which supplies computing power, software and services to other companies are where the growth is – both areas did well.
The CEO commentary sums up the result and underpins why we recently bought the stock into weakness.
“The momentum across the company is extraordinary. Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off with consumers and partners benefiting from our AI tools. In Search, our new AI features are expanding what people can search for and how they search for it. In Cloud, our AI solutions are helping drive deeper product adoption with existing customers, attract new customers and win larger deals. And YouTube’s total ads and subscription revenues surpassed $50 billion over the past four quarters for the first time. We generated strong revenue growth in the quarter, and our ongoing efforts to improve efficiency helped deliver improved margins. I’m looking forward to driving more advances for consumers, customers and creators globally.”
NB: The comments and strong momentum in You Tube are positive for TTD.
MM remains long & bullish GOOGL US
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