October 15, 2010, 11:45 AM — Google Inc. released its third-quarter earnings after Thursday's market close, reporting a 32 percent increase in net income to $2.17 billion and a 23 percent increase in gross revenue ($7.29 billion) from last year's Q3.
Google shares (NASDAQ: GOOG) soared in Thursday's after-hours trading, and continued showing strength in Friday's regular trading, with investors pushing the stock up 55.46, or 10.3 percent, to 596.39 by late morning.
Beyond the top-line numbers, how did Google perform in Q3? Here's a look at some key metrics as detailed in the company's earnings release, and a summary below:
* Google-owned sites generated revenue of $4.83 billion, or 67% of total revenue, a 22% increase over Q3 '09 revenue of $3.96 billion.
* Google partner sites generated revenue (through AdSense programs) of $2.2 billion, or 30% of total revenue, also a 22% increase from year-ago quarterly revenue of $1.8 billion.
* Revenues from outside the U.S. totaled $3.77 billion, or 52% of total Q3 revenue, compared to 52% in the second quarter of 2010 and 53% in the third quarter of 2009.
* Aggregate paid clicks (clicks related to ads served on Google sites as well as the sites of Google AdSense partners) increased 16% over Q3 2009 and 4% over this year's second quarter.
* Average cost-per-click (clicks related to ads served on both Google and Adsense partner sites) rose 3% over last year's Q3 and 2% over Q2 of this year.
* Traffic acquisition costs (the portion of revenue Google shares with partners) were $1.81 billion, compared to $1.56 billion in the third quarter of 2009. As a percentage of advertising revenue, TAC was 26%, compared to 27% in last year's Q3.
* Other cost of revenues (data-center operation expenses, amortization of intangible assets, content acquisition costs, credit card processing charges, etc.) increased to $747 million from $667 million in Q3 2009, but dropped as a percentage of revenue to 10% from 11%.
* Operating expenses (other than cost of revenues) were $2.19 billion, or 30% of revenue, compared to $1.64 billion, or 28% of revenues, in the year-ago quarter.
* Cash on hand (cash, cash equivalents, and marketable securities) was $33.4 billion as of Sept. 30.
* Google employed 23,331 full-time workers as of Sept. 30, up from 21,805 full-time employees as of June 30, 2010, a 7% increase in just three months.
So what does it all mean? The obvious take-away is that Google clearly is a company in growth mode. More people are clicking on their ads, which in part reflects the recovery of online advertising as consumers begin to at least think of spending more.
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