Alphabet Inc (NASDAQ:GOOG) exceeded expectations in its third-quarter earnings for 2023, with strong performance in both its cloud and core advertising businesses.
The company reported revenue of $88.27 billion, surpassing the $86.45 billion forecast, while earnings per share (EPS) reached $2.12, beating the expected $1.84.
Operating income totaled $28.52 billion, with an operating margin of 32%, slightly above estimates.
Alphabet’s Google Services unit, which includes its main advertising business, generated $76.51 billion in revenue, above the expected $75.24 billion. Advertising revenue reached $65.85 billion, with search and other ads contributing $49.39 billion and YouTube ads generating $8.92 billion.
Subscriptions, platforms, and devices outperformed, posting $10.66 billion, exceeding estimates of $9.79 billion.
Google Cloud was a key highlight, bringing in $11.35 billion in revenue, surpassing the $10.79 billion estimate. The cloud division's operating income hit $1.95 billion, significantly higher than the expected $1.11 billion.
CEO Sundar Pichai highlighted Alphabet’s strong momentum, emphasizing the company’s AI advancements across its platforms.
“Our commitment to innovation, as well as our long-term focus and investment in AI, are paying off," Pichai said.
“We generated strong revenue growth in the quarter, and our ongoing efforts to improve efficiency helped deliver improved margins," Pichai added, pointing to the company's continued focus on driving advances for consumers, customers, and creators.
Shares of Alphabet’s Class A stock were up over 3.2% following the earnings report.