Home » Google, Microsoft & Snap Boast Impressive Ad Results In Third-Quarter Earnings

25 October, 2023

Google, Microsoft & Snap Boast Impressive Ad Results In Third-Quarter Earnings

NEW YORK CITY - September 3: Charging Bull sculpture with people on September 3, 2015 in New York City. The sculpture is both a popular tourist destination, as well as

Three of the world’s most important (and two of its largest) tech companies reported impressive Q3 earnings after successive quarters of consistently inconsistent growth.

After the close of trading Tuesday, Microsoft surged with better-than-expected sales and strong cloud performance. Alphabet declined due to lower cloud revenue. Snap rose over 20 per cent with improved advertising business.

Alphabet

Alphabet, Google’s parent, posted an impressive 11 per cent Q3 revenue growth, driven in large part by advertising.

YouTube ad revenue beat expectations at US$7.95 billion (AU$12.43 billion), but Google Cloud fell short at $8.41 billion (AU$1315 billion). Google advertising revenue came to US$59.6 billion (AU$93.19 billion).

Sundar Pichai, Alphabet’s CEO, said: “I’m pleased with our financial results and our product momentum this quarter, with AIdriven innovations across Search, YouTube, Cloud, our Pixel devices and more. We’re continuing to focus on making AI more helpful for everyone; there’s exciting progress and lots more to come.”

Ruth Porat, Alphabet’s president and chief investment o officer added: “The fundamental strength of our business was apparent again in Q3, with US$77 billion (AU$120.4 billion) in revenue, up 11 per cent year over year, driven by meaningful growth in Search and YouTube, and momentum in Cloud. We continue to focus on judicious capital allocation to deliver sustainable financial value.”

Microsoft

Microsoft’s stock surged 6 per cent in after-hours trading following fiscal first-quarter results exceeding Wall Street expectations.

The Productivity and Business Processes unit, featuring Microsoft 365 and Teams, posted strong results. The More Personal Computing segment, which includes Windows and Surface, contributed US$13.67 billion (AU$21.37 billion) in revenue. Microsoft also reported slowing expense growth and anticipates a 5 per cent growth rate for the fiscal second quarter.

Search and news advertising revenue excluding traffic acquisition costs grew 10 per cent. Despite not quoting the actual figures, it’s safe to assume that they are far lower than Google’s.

“With copilots, we are making the age of AI real for people and businesses everywhere,” said Satya Nadella, chairman and chief executive officer of Microsoft.

“We are rapidly infusing AI across every layer of the tech stack and for every role and business process to drive productivity gains for our customers.”

Snap

Snap’s shares initially surged 20 per cent in after-hours trading as it exceeded Q3 expectations. The company returned to sales growth, with a five per cent increase from the previous year. However, Snap observed a pause in spending by advertisers due to the Middle East conflict, impacting Q4 sales. Snap’s net loss widened two per cent year-on-year to US$368 million (AU$575 million). Snapchat+ reached over five million subscribers in its recent quarter, up from four million during the prior quarter.

“We are focused on improving our advertising platform to drive higher return on investment for our advertising partners, and we have evolved our go-to-market efforts to better serve our partners and drive customer success,” Snap CEO Evan Spiegel said in the statement.

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