After a slump in the second quarter of this year, primarily due to COVID-19 induced suspended business activities, Google-parent Alphabet is back on growth path. The company reported robust growth in Q3 2020 numbers as online shopping primed in the post COVID-19 business world, globally. This comes after the company reported negative growth in Q2’2020, a first in its history since going public in 2004.
Let us get the numbers aside first. In terms of revenues, Alphabet reported total revenues of $46.2 billion in the third quarter, up 14% year-on-year. Overall operating income rose to $11.2 billion, a 24% year-on-year increase. And as one would expect, over half of those revenue numbers came from Google, which helped rake in $37 billion to Alphabet’s cash registers. This includes all of Google properties’ advertisement revenues, including those from Youtube.
“We had a strong quarter, consistent with the broader online environment,” said Sundar Pichai, CEO at both Alphabet and Google. “It’s also a testament to the deep investments we’ve made in AI and other technologies, to deliver services that people turn to for help, in moments big and small”, he added.
Individually, all of Alphabet’s products reported marginal to excellent increase in revenue numbers. For instance, revenue from Youtube ads crossed $5 billion in Q3 2020, up from $3.8 billion in the same quarter of previous year. As work from home becomes the new normal, hunger for higher cloud computing power has continued to grow. That reflected in Google Cloud numbers as well, which raked in $3.4 billion in revenues for Q3 2020. This is up from the $2.34 billion that cloud services brought in during Q3 2019. Alphabet said it would elevate cloud into a separate reporting unit starting in the fourth quarter, effectively dropping cloud financial results from its Google unit and giving investors their first view into the business’ profitability.
Alphabet share price reflected the strong numbers too. The share price, which is up by nearly 13% on the year according to Reuters data, rose 8.5% after hours to $1,689.89. It stabilized to a 6.5% increase in after hours, signaling the cautious approach that investors have recently taken to big tech stocks.