Alphabet recorded revenue growth in the third quarter of 2024 and exceeded analysts’ expectations

Alphabet beat analysts’ expectations with better-than-expected earnings and revenue results. The company’s revenue reached $88.27 billion, beating LSEG’s estimate of $86.3 billion, and earnings per share were $2.12, compared to estimates of $1.85. The largest contributor to this success was Google Cloud, which generated revenue of $11.35 billion, up 35% year-over-year. This significant growth is due to the expansion of the range of AI solutions for corporate clients.

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Alphabet’s performance in the third quarter was also bolstered by its advertising business, including YouTube revenue. The platform brought in $8.92 billion, slightly exceeding StreetAccount analysts’ expectations ($8.89 billion). Google’s core advertising business, which accounted for $49.4 billion in revenue, grew 12.3% year over year and remains the company’s largest source of revenue. As the company’s chief financial officer, Anat Ashkenazi, noted, this area maintains high growth rates and remains significant to Alphabet’s overall success.

Against the backdrop of high demand for cloud solutions, Google Cloud not only attracted new customers, but also demonstrated rapid growth rates, which became possible thanks to the active implementation of AI tools. The company emphasizes that Alphabet’s full range of AI solutions is now used by billions of users around the world, which creates a “closed loop” that promotes further adoption of AI and improved service quality. Sundar Pichai also noted that the strategic development of cloud products gives the company a strong competitive advantage.

Alphabet’s advertising revenue reached $65.85 billion, up from $59.65 billion a year earlier, although the pace of growth slowed slightly compared with previous quarters. However, advertising on YouTube has exceeded analysts’ expectations, showing steady growth and withstanding competition from platforms such as Netflix, TikTok and Amazon. According to Chief Business Officer Philipp Schindler, the introduction of Gemini’s AI model has improved YouTube’s recommendation algorithms, making the content offered more personalized and relevant.

The Google Workspace and Google Cloud segments continue to show stable growth. According to Ashkenazi, Google Cloud’s growth rate exceeds the overall performance of the cloud division. Workspace, in turn, is showing strong customer demand for cloud computing.

The Other Bets section, which includes projects Verily (medical technologies) and Waymo (autonomous cars), showed revenue of $388 million, which is significantly higher than last year’s figure ($297 million). An important step for Waymo was the successful raising of $5.6 billion in funding, which will allow the company to expand robotaxi services in cities such as Los Angeles, San Francisco and Phoenix.

Google Lens, which uses the power of the camera to power visual search queries, has reached more than 20 billion searches per month, making it one of Alphabet’s fastest-growing solutions. The platform is heavily used for shopping and has become an important part of the search ecosystem, strengthening Alphabet’s position in the e-commerce market.

In the third quarter, the company made significant internal changes, including personnel changes at the senior level. Nick Fox, previously head of Google Assistant, has replaced Prabhakar Raghavan as head of search and advertising. The team working on the Gemini application moved to Google DeepMind under the leadership of Demis Hassabis.