Introduction:
in 30th October 2020, Alphabet, Google’s parent company, announced its quarterly earnings (3Q) report.
The company generated total revenue of $446.2 billion with 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 to 8.5%.
Let’s see how it turned out.
YouTube Revenue:
YouTube revenue increased from $3.8 billion to $5.0 billion in the third quarter report. Previously, analysts predicted that YouTube could generate a total of $4.52 billion in the last quarter.
However, YouTube surpassed that by 0.48 billion. The increase in profit is due to the strong growth of advertisements on YouTube.
Google Cloud Revenue:
It managed to make $3.44 billion of the $2.4 billion in the third quarter report. It increased 1% from previous quarterly gains. The success of Google Cloud is an achievement for the company, as many deals have been made for these categories.
Includes cloud computing, software and other services provided by Google to its users around the world.
Income from other bets:
Alphabet has many other subsidiaries which include Calico, Waymo, Wings and many others. These are collectively known as XXVI Holdings, Inc., which we like to call ‘Other Bets’.
These subsidiaries do not provide any major profit for the company but are a negative source of revenue. The company lost nearly $1.1 billion in the quarter, up from a year ago.
We can see that the financial issues of these subsidiaries are still not very promising.
Google Revenue:
The company got most of its revenue from Google, with up to 99.66%. Most of the revenue coming from Google is due to its ‘search product’.
Sundar Pichai, CEO of Google also said, ‘This year, including this quarter, has shown how valuable Google’s founding product, search, has been to people.
Google also got other revenues that include hardware like Pixel phones, Pixel books, Chrome books, etc.
Total revenue was about $5.48 billion this year, up from $4.05 billion last year.
This increase could be due to the lockdown period when users were at home and using these gadgets for entertainment purposes.
Conclusion:
In conclusion, we can say that Alphabet is doing a profitable business. The company has nearly $11.6 billion in free cash flow, which is appreciable.
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