Alphabet, Google's parent company, reported robust financial results for the third quarter, with revenue reaching $88.268 billion, a 15% increase from $76.693 billion in the same period last year. Excluding currency fluctuations, revenue grew by 16%. The net profit, according to US Generally Accepted Accounting Principles, was $26.301 billion, marking a 34% increase from $19.689 billion year-on-year. Earnings per share rose from $1.55 to $2.12.
Following the earnings release, Alphabet's CEO Sundar Pichai, CFO Anat Ashkenazi, and Chief Brand Officer Philipp Schindler held a conference call with analysts to discuss business operations and insights. Sundar Pichai highlighted several AI-driven search products that have significantly enhanced user experience and are anticipated to drive sustained growth in the company's search operations over the next few years.
Pichai discussed products like Circle to Search and Lens with video search, which now handles nearly 20 billion monthly search requests. AI overviews also have over a billion users, and continuous innovation is expected to advance Alphabet's search business further. Despite challenges such as latency and query costs, the company has made substantial progress and foresees ongoing innovation in search capabilities.
In terms of infrastructure, Pichai emphasized the competitive advantage offered by Google's development of in-house Tensor Processing Units (TPUs). The sixth-generation TPUs demonstrate Google's dedication to integrating advanced AI solutions both internally and for cloud customers. Alphabet's AI infrastructure and services continue to thrive, supported by strategic investments.
Anat Ashkenazi provided details on capital expenditures, which amounted to $13 billion this quarter. This investment focused heavily on technology infrastructure, particularly on servers, TPUs, GPUs, and data center facilities. Approximately 60% of this investment supported server capacity, while 40% was allocated to data center and networking equipment. Looking ahead, capital investments for the fourth quarter are expected to approximate this quarter's spending, with a notable increase anticipated in 2025.
Pichai also added that Google's pricing for its TPUs is competitive, creating efficiency both externally and internally, with ongoing performance enhancements in search models.
