Alphabet, Google’s parent company, topped Wall Street’s revenue targets Tuesday in third-quarter financial results that showed strong growth in the company’s core businesses.
The company said revenue grew 15% to $88.3 billion in the third quarter, exceeding Wall Street targets of $86.3 billion. Meanwhile, Alphabet’s focus on keeping costs under control helped net income increase 34% compared to the same period last year, to $26 billion, or $2.12 per share.
During the earnings call, Alphabet CEO Sundar Pichai said that more than a quarter of all new code at Google is now generated by artificial intelligence, with human engineers vetting the work for accuracy.
Alphabet shares rose 5.3% to $180.20 in after-hours trading Tuesday, following the results.
Google Search remained the company’s main revenue driver, generating $49.3 billion in revenue during the quarter, up 12% from a year ago, and YouTube and Google Cloud also grew. YouTube revenue reached $8.9 billion, an increase of 12%, and cloud revenue reached $11.3 billion, an increase of 34%. Meanwhile, traffic acquisition costs (TAC) were $13.7 billion, up nearly 9% and earnings per share rose to $2.12.
Ahead of the call, Pichai said in a statement that the company’s “long-term focus and investment in AI” is starting to pay off with both enterprise customers and everyday consumers.
“In search, our new AI features expand what people can search for and how they search for it,” Pichai said. “In the cloud, our AI solutions help drive deeper product adoption with existing customers, attract new customers and win bigger deals. Total YouTube ad and subscription revenue surpassed $50 billion over the past four quarters for the first time.
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