Google’s parent company Alphabet has ignored any concerns about a slowdown in online advertising with another successful quarter of revenue, supported by continued strong demand for YouTube ads and steady growth in its cloud computing business. .
Alphabet said Tuesday that third-quarter net profit rose 68% to $ 18.94 billion, while revenue jumped 41% to $ 65.12 billion. The results exceeded analysts’ estimates for profit of $ 16.2 billion and sales of $ 63.5 billion, according to data provided by FactSet.
The strong performance underscores the value of two of the Internet’s top destinations: Google’s search engine and YouTube’s video platform. While other social networks and ad-dependent businesses have felt the spur of Apple’s policy change to force apps to ask users if they want to be tracked, Google’s ad revenue has remained strong. Advertising revenue increased 43% in the quarter to $ 53.13 billion.
Alphabet’s chief financial officer Ruth Porat said in a conference call with analysts that privacy changes in Apple’s iOS mobile operating system had a “modest impact” on YouTube ads, but noted that Google’s advertising activity remained strong globally and across a wide range of industries.
Last week, Snap, the parent company of social media app Snapchat, said the impact of Apple’s changes was more severe than expected. On Monday, Facebook said it had suffered “continuing headwinds” related to Apple’s decision, even as the company’s revenue jumped 35% in the third quarter.
Andrew Boone, equity research analyst at JMP Securities, said Google was immune to the effects of Apple’s changes as many of its services are widely used in web browsers and less as apps. , which are subject to Apple’s rules.
“It just seems the business is immune to the impact,” he said.
Even though competition officials around the world target Google companies for competition concerns, Alphabet continues to grow at a breakneck pace for a company of its size, while improving profitability by reducing costs. The company said it converted 32% of its sales to operating profit in the third quarter, up from 24% a year ago.
In a research note last month, Brad Erickson, analyst at RBC Capital Markets, said Alphabet was facing increased regulatory pressure, but it was “an almost unfairly good company.” He noted that in conversations with advertisers, Google remains the “first dollar spent on any digital strategy”.
The company also reported continued growth in its Google Cloud business. The unit, which competes with cloud computing services for businesses from Amazon and Microsoft, posted a 45% increase in revenue, to $ 4.99 billion, while cutting losses to 644 million dollars over the previous year.
Alphabet also continues to increase the size of its workforce, exceeding 150,000 employees at the end of September, against 132,000 a year earlier. Alphabet said it plans to increase spending on renovations and new office construction to accommodate its growing number of employees.