Google Q2 Results : Improvement Upon 2012, But Disappoint Market Expectations

Emmanuel Dunand/Agence France-Presse — Getty Images Larry Page in May.

Image Courtesy : Emmanuel Dunand/Agence France-Presse — Getty Images

Google reported $14.11 billion in revenue  an increase of over 19% compared to Q2 2012 , but it missed the expectations that the analysts had predicted for it. Wall street was expecting revenue surge of over 20% when compared to Q2 2012.

Results Summary

  • GAAP operating income in the second quarter of 2013 was $3.12 billion, or 22% of revenues. In comparison the GAAP operating income in Q2 2012 was $3.24 billion, or 27% of revenues, in the second quarter of 2012. Non-GAAP operating income in the second quarter of 2013 was $3.99 billion, or 28% of revenues. In comparison non-GAAP operating income in Q2 2012 was $3.94 billion, or 33% of revenues.
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Financial Highlights

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Revenues and other information – On a consolidated basis, Google Inc. revenues for the second quarter were $14.11 billion, an increase of 19% when compared to the same quarter in 2012.

Google Revenues (advertising) – Google revenues were $13.11 billion, or 93% of consolidated revenues, in the second quarter of 2013, a 20% increase over second quarter 2012 revenues of $10.96 billion.

  • Google Sites Revenues – Google-owned sites generated revenues of $8.87 billion, or 68% of total Google revenues, in the second quarter of 2013. This represents an 18% increase over second quarter 2012 Google sites revenues of $7.54 billion.
  • Google Network Revenues – Google’s partner sites generated revenues of $3.19 billion, or 24% of total Google revenues, in the second quarter of 2013. This represents a 7% increase from second quarter 2012 Google network revenues of $2.98 billion.

Google International Revenues – Google revenues from outside of the United States totaled $7.2 billion, representing 55% of total Google revenues in the second quarter of 2013, compared to 55% in the first quarter of 2013 and 54% in the second quarter of 2012.

  • Google revenues from the United Kingdom totaled $1.32 billion, representing 10% of Google revenues in the second quarter of 2013, compared to 11% in the second quarter of 2012.

Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of Network members, increased approximately 23% over the second quarter of 2012 and increased approximately 4% over the first quarter of 2013.

Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of Network members, decreased approximately 6% over the second quarter of 2012 and decreased approximately 2% over the first quarter of 2013.

TAC – Traffic acquisition costs, the portion of revenues shared with Google’s partners, increased to $3.01 billion in the second quarter of 2013, compared to $2.60 billion in the second quarter of 2012. TAC as a percentage of advertising revenues was 25% in the second quarter of 2013, compared to 25% in the second quarter of 2012.

Motorola Mobile Revenues (hardware and other) – Motorola Mobile revenues were $998 million, or 7% of consolidated revenues in the second quarter of 2013, compared to $843 million, or 7% of consolidated revenues in the second quarter of 2012.

Cash – As of June 30, 2013, cash, cash equivalents, and marketable securities were $54.4 billion.

Headcount – On a worldwide basis, Google employed 44,777 full-time employees (40,178 in Google and 4,599 in Motorola Mobile) as of June 30, 2013, compared to 53,891 full-time employees (38,739 in Google, 9,982 Motorola Mobile, and 5,170 Motorola Home) as of March 31, 2013.

Image credits: Peter Forret

Image credits: Peter Forret

Google’s Q2 2013 below market expectation results may just be an aberration. Google is strongly poised to maintain its dominance in search space.With further consolidation of its mobility services, Google may be able to sell its ad space on mobile and desktop together to advertisers. With YouTube,Google Map and Android phone markets getting stronger, Google may soon rule both on desktop and mobile spaces.

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One thought on “Google Q2 Results : Improvement Upon 2012, But Disappoint Market Expectations

  1. Pingback: Shikhar Tech Labs | Google Q2 Results Released

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