Alphabet Inc., now the parent company of Google, reported on Thursday third-quarter revenues of $18.7 billion and revenue growth of 13 percent year over year.
The company attributed part of its revenue boost to the “substantial growth of mobile search revenue” as well as income from YouTube and Programmatic Advertising.
“Our Q3 results show the strength of Google’s business, particularly in mobile search,” Alphabet and Google CFO Ruth Porat said in a statement. “With six products now having more than 1 billion users globally, we’re excited about the opportunities ahead of Google, and across Alphabet.”
For the third quarter 2015, Alphabet’s advertising revenues totaled nearly $16.8 billion, representing 13 percent growth year over year and five percent growth over the previous quarter. Revenues from Google websites brought in an additional $13.1 billion, marking a 16 percent growth year over year and six percent growth over the second quarter 2015. Revenues from the United States alone hit $8.8 billion, up 19 percent year over year, Porat said Thursday.
Porat said ongoing improvements in ad formats and delivery, including video advertising, helped drive revenue growth, and said growth in the United States and the United Kingdom in particular reflected the growth in mobile search.
Though Porat said mobile was an “important catalyst in the quarter” she said desktop use remained a “solid contributor,” helping keep the company “firing on all cylinders.”
According to Google Inc. CEO Sundar Pichai, mobile search traffic has now surpassed desktop traffic worldwide. Pichai said demand for mobile search is especially high in India, which has surged to the number two country for mobile search queries behind the United States. Mobile currently accounts for 50 percent of queries, Pichai said.
Pichai also said mobile users are also spending more time watching videos, with mobile watch time for apparel and toy videos on YouTube doubling this year, prompting a shift in advertising strategies.
“The shift to video is a profound medium shift especially on mobile,” Pichai said. “Advertisers are being increasingly conscious…and we’re seeing great traction there and they’re moving more of their traditional budgets to YouTube.”
Pichai said going forward mobile will present “unique opportunities in terms of better understanding our users” and said the future of Google’s mobile business is “as compelling or moreso than desktop, but it’s going to take some time to get there.”
Alphabet’s report also revealed the number of paid clicks on Google websites – boosted by mobile search and YouTube – grew 35 percent year over year and 7 percent over the previous quarter. Aggregate paid clicks rose 23 percent year over year and 6 percent over the previous quarter.
GAAP earnings per share for the quarter were $5.73.
In after-hours trading Thursday, Alphabet stock was up more than 9 percent on the news.
Starting in the fourth quarter, Porat said Alphabet will move to reporting in segments, including Google and “Other Bets,” which will include the company’s earlier stage businesses, to help outsiders better understand how the business is managed.