Alphabet Inc. (NASDAQ: GOOGL), parent company of Google, announced its third quarter earnings for fiscal year 2017 and beat estimates in both earnings and revenue. Shares surged over 6 percent during Friday trading hours.
Alphabet reported revenue of $27.7 billion, increasing 24 percent year over year, and beating Thomson Reuters analysts’ estimates of $27.2 billion. The company also reported an EPS of $9.57, increasing 32 percent year over year, and topping Thomson Reuters analysts’ estimates of $8.33.
Google generates majority of its revenue from advertisement. In the third quarter, Google reported $24 billion in ad revenue, much higher than last year’s $19.8 billion.
Google also reported $5.5 billion in traffic acquisition costs, beating the $5.24 billion estimated by StreetAccount. Paid clicks on Google have rose 55 percent year over year. Aggregate paid click rose 47 percent versus the expected 46.1 percent by Street Account. Costs per click is now down 21 percent.
Google released its Pixel phone after its acquisition of HTC’s pixel division team in order to expand the smartphone to keep up with competitors like Apple.
"We had a terrific quarter," said Ruth Porat, CFO of Alphabet, “Our momentum is a result of investments over many years in fantastic people, products and partnerships."
Google now highlights new initiatives such as new hardware products, smartphone development, its self driving division: Waymo, and its cloud computing business with Cisco. Google Cloud’s headcount has jumped from 69,953 to over 78,000 year over year.
"You're clearly entering an era where you're going to have different types of computing experiences," said Google CEO Sundar Pichai.
Google will be testifying before Congress, along with Twitter and Facebook, over the fake Russian ads during the time of the 2016 U.S. election. So far, Google only reportedly discovered less than $100,000 worth of ads.
Google shares hit an all time high on Friday of $1062.37. Google shares have increased 31.8 percent year to date.