Google’s parent company Alphabet Inc.’s (GOOGL – Analyst Report) shares gained nearly 1% in after-hour trading yesterday on the back of its robust third-quarter earnings performance. Both earnings and revenues not only outpaced the estimates but also recorded healthy year-on-year gains in the quarter.

The company’s CFO, Ruth Porat said: “We had a great third quarter… Mobile search and video are powering our core advertising business and we’re excited about the progress of newer businesses in Google and Other Bets.”

A Detailed Look into Q3 Performance 

Alphabet reported GAAP earnings of $7.25 per share during the quarter, surpassing the Zacks Consensus Estimate of $6.64. Earnings surged 26.5% from the year-ago level. Revenues (excluding total traffic acquisition costs) of $18.27 billion were much above the Zacks Consensus Estimate of $17.91 billion. Also, it jumped 19.3% year over year.

Moreover, the company’s GAAP operating income soared 22.5% from the year-ago level to $5.77 billion during the quarter.

Impressive performances by the company’s two broader segments – Google and Other Bets – primarily drove growth during the quarter. While revenues at the Google segment surged nearly 20.1% year over year to $22.25 billion in the third quarter, Other Bets segment revenues jumped 39.7% from the year-ago-level to $197 million. Strong year-over-year growth in revenues from Google websites (up 23%), Google Network Members’ websites (up 1%) and Google advertising revenues (up 18%) primarily boosted the Google segment during the quarter. Total traffic acquisition costs were almost $4 billion, accounting for 21% of total advertising revenue.

Though the Other Bets segment registered an operating loss of $865 million during the third quarter, it was significantly narrower than a loss of $980 million incurred in the prior-year quarter. Separately, cost per click (CPC) was down 5% year over year. Paid clicks were up 9% year over year.  Alphabet benefited from increased use of Mobile Search by consumers, thanks to the ongoing efforts to enhance the Mobile Search experience.

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