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Google Inc. (GOOG)

  • Oct. 16, 2014, 4:19 PM
    • Google's (NASDAQ:GOOG) paid clicks rose 17% Y/Y (and 2% Q/Q) in Q3, a marked slowdown from Q2's 25% growth. Clicks on Google sites +24% vs. +33% in Q2; clicks on ad network sites (hurt by policy changes) +2% vs. +9%.
    • On the bright side, cost per click (CPC) was flat Q/Q and only down 2% Y/Y, suggesting the pressure caused by low smartphone ad prices is abating. CPC for Google sites and ad network sites both fell 4%.
    • EPS was hurt by heavy spending: Opex was 37% of revenue vs. 35% in Q2 and 33% a year ago. R&D spend +46% to $2.66B; sales/marketing +28% to $2.08B; G&A +20% to $1.37B. Headcount grew by nearly 3K from the end of Q2 to 55,030.
    • Google sites revenue +20% Y/Y to $11.25B; ad network revenue +9% to $3.43B. All other revenue (Nexus hardware, Google Play, etc.) +50% to $1.84B.
    • Traffic acquisition costs were 23% of revenue, even with Q2 and down from 24% a year ago. International sales were 58% of revenue, even with Q2 and up from 56% a year ago.
    • Free cash flow was $3.58B,+28% Y/Y but less than net income of $4.37B. Capex totaled $2.42B (15% of revenue ex-TAC).
    • Q3 results, PR
    | Oct. 16, 2014, 4:19 PM | 4 Comments
  • Oct. 16, 2014, 4:02 PM
    • Google (NASDAQ:GOOG): Q3 EPS of $6.35 misses by $0.18.
    • Revenue of $16.52B (+20.1% Y/Y) misses by $70M.
    • Shares -1.1%.
    • Press Release
    | Oct. 16, 2014, 4:02 PM | 15 Comments
  • Oct. 15, 2014, 5:35 PM
  • Jul. 18, 2014, 1:26 PM
    • 9 firms have hiked their Google (GOOG, GOOGL) targets after the company reported mixed Q2 numbers, a 25% Y/Y increase in paid clicks, and a smaller-than-expected 6% drop in cost per click (CPC). BGC has upgraded shares to Buy.
    • "With now four quarters in a row of 20%+ Web sites revenue growth, Google’s search business appears to be benefiting from a virtuous cycle of audience growth and pricing power," gushes Canaccord ($715 PT). It sees product listing ads, Android share gains, and Google's efforts to integrate more data within search results boosting future growth.
    • JPMorgan sees improving CPC trends for Google sites pointing to "more material improvements in mobile monetization, or at least that the mobile pricing gap is becoming less of a drag." The firm's 2014 revenue estimate has been hiked, but its EPS estimate has been cut following stronger-than-expected spending.
    • SunTrust is a little concerned about a decline in U.S. growth to 12% and soft ad network prices (mobile is viewed as a culprit). But it's also pleased with paid click growth, and unconcerned about Nikesh Arora's pending departure. Cantor thinks the top-line numbers suggest Google "continues to gain share both in search and display."
    • Meanwhile, the Telegraph reports Google is looking to bring Fiber to the U.K. The company suggested on its CC (transcript) more Fiber announcements are on tap.
    • Prior Google earnings coverage.
    | Jul. 18, 2014, 1:26 PM | 8 Comments
  • Jul. 17, 2014, 6:18 PM
    • Focus on Google's (NASDAQ:GOOG) Y/Y cost per click (NYSE:CPC) figures rather than "noisy" Q/Q figures, says departing sales chief Nikesh Arora on the CC. The Y/Y numbers show moderating declines (-6% in Q2, -9% in Q1), as Google takes steps to boost mobile ad prices and grow demand for product listing ads (PLAs).
    • Arora also states Google has initiatives afoot to improve CPCs in international/emerging markets, where they tend to be well below U.S. levels (Facebook can relate). Demographics/income levels are responsible for part of the gap.
    • Other CC remarks: 1) Google is working with 34 cities on Fiber requirements, and has achieved major cost reductions. More Fiber announcements will arrive later in 2014. 2) PLAs are driving 3x as much traffic as a year ago. 3) ~60% of Google's cash ($61.2B at the end of Q2) is offshore. 4) Google still thinks mobile ad CPCs will eventually exceed PC CPCs, thanks to their ability to use location data and drive local/offline commerce.
    • CC live blogs: I, II
    • GOOG +1.2% AH. Q1 results, details.
    | Jul. 17, 2014, 6:18 PM | Comment!
  • Jul. 17, 2014, 4:27 PM
    • In tandem with its Q2 report, Google (NASDAQ:GOOG) announces long-time sales chief Nikesh Arora (well-respected in the industry) is leaving to become SoftBank's (OTCPK:SFTBF) vice chairman and Internet/Media chief.
    • Google's paid clicks (boosted by mobile and product listing ads) rose 2% Q/Q and 25% Y/Y in Q2, after growing 25% Y/Y in Q1. Paid clicks on Google sites rose 6% Q/Q and 33% Y/Y, while those on ad networks were down 5% Q/Q and up 9% Y/Y.
    • Cost per click (hurt by low smartphone ad prices) was flat Q/Q and down 6% Y/Y. The Y/Y drop was narrower than Q1's 9%. CPC was down 2% Q/Q and 7% Y/Y on Google sites, and up 3% Q/Q and down 13% Y/Y on ad networks.
    • Google sites revenue (69% of total) +23% Y/Y vs. +21% in Q1. Network revenue (21% of total) +7% Y/Y vs. +4%.  Other revenue (10% of total, includes hardware and Google Play) +53% vs. +48%.
    • Traffic acquisition costs were 23% of revenue, even with Q1 and down from 25% a year ago. Opex was 35% of revenue, even with Q1 and up from 34% a year ago.
    • Free cash flow was $2.98B, below net income of $4.18B. Capex was a hefty $2.65B.
    • Google ended Q2 with $61.2B in cash, up $1.8B Q/Q.
    • GOOG +2% AH. Q2 results, PR.
    | Jul. 17, 2014, 4:27 PM | 3 Comments
  • Jul. 17, 2014, 4:12 PM
    • Google (NASDAQ:GOOG): Q2 EPS of $6.08 misses by $0.15.
    • Revenue of $15.96B (+21.7% Y/Y) beats by $350M.
    • Shares +1.1%.
    • Press Release
    | Jul. 17, 2014, 4:12 PM | 5 Comments
  • Jul. 16, 2014, 5:35 PM
  • Apr. 16, 2014, 6:21 PM
    • Going forward, Google (GOOG) will break out its paid click and cost per click data in more detail, CFO Patrick Pichette states on the CC. Numbers for Google's reporting segments (sites, ad network, etc.) will be given in addition to a company-wide figure. (CC live blog)
    • The remarks come after Google reported disappointing Q1 paid click growth (-1% Q/Q and +26% Y/Y). The numbers might fuel questions about the impact mobile apps (they account for 86% of U.S. smartphone activity, per Flurry) are having on search activity. When indirectly asked about the issue, sales chief Nikesh Arora only said Google is trying to succeed in both realms.
    • Pichette states EPS was hurt by one-time legal and M&A expenses, and that Google's expenses would've been in-line with its targets otherwise.
    • Separately, re/code reports Marissa Mayer is intent on convincing Apple to abandon Google as its default iOS search provider in favor of Yahoo (YHOO). Google's dominant mindshare, together with Apple's Maps experience, might make Cupertino think twice.
    • GOOG now -2.8% AH. Q1 results, details.
    | Apr. 16, 2014, 6:21 PM | 5 Comments
  • Apr. 16, 2014, 4:15 PM
    • After falling 2% Q/Q in Q4 and 8% in Q3 thanks to mobile softness, Google's (GOOG) cost per click (ad prices) was flat Q/Q in Q1. On a Y/Y basis, it fell 9%.
    • Paid clicks (boosted by mobile and product listing ads) grew 26% Y/Y, a slower clip than Q4's 31% but even with Q3. Traffic acquisition costs fell to 23% of revenue from 24% in Q4 and 25% a year ago.
    • Google sites revenue (68% of total) +21% Y/Y vs. +22% in Q4. Ad network revenue (22% of total, pressured by policy changes) +4% vs. +3%. Other revenue (10% of total, includes Nexus hardware and search appliances) grew 48%, down from Q4's 99%.
    • Google spent aggressively: Opex rose to 35% of revenue from 33% in Q4 and 31% a year ago. Capex was $2.35B (15% of revenue), up from $2.26B in Q4. Free cash flow was $2.05B, well below net income of $4.3B. Headcount (exc. Motorola) rose to 46.2K from 43.8K at the end of Q4.
    • Google had $59.4B in cash at the end of Q4, +$700M Q/Q. Its Q1 tax rate was just 18%.
    • Q1 results, PR
    | Apr. 16, 2014, 4:15 PM | 7 Comments
  • Apr. 16, 2014, 4:02 PM
    • Google (GOOG): Q1 EPS of $6.27 misses by $0.15.
    • Revenue of $15.42B (+19.1% Y/Y) misses by $90M.
    • Shares -1.2%.
    • Press Release
    | Apr. 16, 2014, 4:02 PM | 46 Comments
  • Apr. 16, 2014, 12:10 AM
  • Apr. 15, 2014, 5:35 PM
  • Jan. 31, 2014, 11:44 AM
    • 13 sell-side firms have upped their Google (GOOG +3.6%) PTs following the company's mixed Q4 results and split announcement. Shares remain higher on a down day for equities.
    • Google's market cap now stands at $395B, and its enterprise value (market cap - net cash/investments) of $342B exceeds Apple's $301B.
    • Needham (Buy, PT raised to $1,350 from $1,150) is pleased with Google's accelerating international paid click growth (likely driven by mobile), and the strong performance of its "Other Google Revenue" segment (fueled by the Nexus 5 and Chromecast).
    • RBC (Outperform, PT upped to $1,400 from $1,300), like others, is happy Motorola ($384M Q4 op. loss) will soon be out of the way, and notes Google's core international revenue rose 30% Y/Y. It's also pleased traffic acquisition costs remain under control, and isn't too worried heavy investments led Google's core op. margin to fall 220 bps Y/Y.
    • UBS (Buy, PT raised to $1,350 from $1,300) thinks Google's cost per click (-11% Y/Y in Q4) will improve as Enhanced Campaigns and product listing ads gain more traction.
    • Shares currently go for 20x 2014E EPS (exc. net cash).
    • More on Google, CC transcript
    | Jan. 31, 2014, 11:44 AM | 4 Comments
  • Jan. 30, 2014, 4:31 PM
    • Google's (GOOG) paid click growth, boosted by mobile searches and product listing ads (PLAs), continued to accelerate in Q4. Paid clicks rose 31% Y/Y after growing 26% in Q3 and 23% in Q2.
    • At the same time, mobile continues taking a toll on ad prices: cost per click fell 2% Q/Q and 11% Y/Y after dropping 8% Y/Y in Q3 and 6% in Q2.
    • Google Sites revenue (67% of revenue exc. Motorola) rose 22% Y/Y, the same as Q3. Ad network revenue (23% of total), pressured lately by policy changes meant to improve the user experience, rose 3% vs. 1% in Q3. Other Google revenue (10% of total - Nexus, search appliances) rose 99% vs. 85%.
    • Opex was 33% of revenue, even with a year ago. A hefty $2.26B was spent on capex. Free cash flow was $2.98B, less than net income of $4.1B.
    • International sales made up 56% of revenue, flat Q/Q and up from 54% a year ago. Traffic acquisition costs were 24% of revenue, even with Q3 and down from 25% a year ago.
    • Ahead of the Lenovo deal, Motorola Mobility had Q4 revenue of $1.24B (-18% Y/Y), and an op. loss of $384M.
    • Google ended Q4 with $58.7B in cash/investments (much of it offshore), and $5.5B in debt.
    • Investors take the numbers in stride, GOOG +0.1% AH. CC getting started.
    • Q4 results, PR, slides
    | Jan. 30, 2014, 4:31 PM | 6 Comments
  • Jan. 30, 2014, 4:03 PM
    • Google Inc. (GOOG): Q4 EPS of $12.01 misses by $0.28.
    • Revenue of $16.86B (+17% Y/Y) beats by $100M.
    • Press Release
    | Jan. 30, 2014, 4:03 PM | 4 Comments
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Company Description
Alphabet Inc through its subsidiary Google Inc is engaged in improving the ways people connect with information & productsincludingSearch, Android, YouTube, Apps, Maps & Ads. Italso producesinternet-connected home devices & provides internet services.