Alphabet Earnings and Revenue Top Forecasts

October 27, 2021

Alphabet reported financial results for the quarter ended September 30, 2021. The firm had EPS of $27.99 per share with only $23.48 per share was expected. As to revenue, Alphabet  took in $65.12 billion with $63.34 billion on investor's radar.

YouTube advertising revenue was $7.20 billion but $7.4 billion expected. Google Cloud revenue missed as $4.99 billion came in with $5.07 billion being expected.

Sundar Pichai, CEO of Alphabet and Google, said: “Five years ago, I laid out our vision to become an AI-first company. This quarter’s results show how our investments there are enabling us to build more helpful products for people and our partners. Ongoing improvements to Search, and the new Pixel 6, are great examples. And as the digital transformation and shift to hybrid work continue, our Cloud services are helping organizations collaborate and stay secure.”

Ruth Porat, CFO of Alphabet and Google, said: “Our consistent investments to support long-term growth are reflected in strong financial performance, with revenues of $65.1 billion in the quarter. We continued to deliver across our business by providing helpful and valuable experiences for both consumers and our partners.”

Change in the useful lives of our server and network equipment (unaudited)

In January 2021, we completed an assessment of the useful lives of our servers and network equipment and adjusted the estimated useful life of our servers from three years to four years and the estimated useful life of certain network equipment from three years to five years. This change in accounting estimate was effective beginning in fiscal year 2021, and the effect for the three and nine months ended September 30, 2021, respectively, was a reduction in depreciation expense of $591 million and $2.1 billion and an increase in net income of $460 million and $1.7 billion, or $0.69 and $2.50 per basic share and $0.68 and $2.46 per diluted share.

Share Repurchases (unaudited)

During the three months ended September 30, 2021, we repurchased and subsequently retired 4.6 million  aggregate shares for $12.6 billion, consisting of 0.5 million shares or $1.5 billion of Class A stock and 4.1 million shares or $11.1 billion of Class C stock.

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