Smaaz’s Blog

Google Announces Second Quarter 2007 Results

July 20th, 2007

Google today announced financial results for the quarter ended June 30, 2007.

“Our performance once again demonstrates the strength of our core search and ads business. The growth in our global traffic combined with our ongoing improvements in monetization resulted in solid revenue growth, even in a seasonally slow quarter,” said Eric Schmidt, CEO of Google. “We continue to expand our commitment to deliver compelling hosted applications to businesses of all sizes, most recently agreeing to acquire Postini and its robust set of tools for web communication for the Google Apps suite of products. At the same time, we remain focused on addressing the tremendous opportunities we see worldwide, adding the talent and building the infrastructure that will allow us to continue to provide rich user experiences to Google users around the world.”

Q2 Financial Summary

Google reported revenues of $3.87 billion for the quarter ended June 30, 2007, an increase of 58% compared to the second quarter of 2006 and an increase of 6% compared to the first quarter of 2007.  Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC.  In the second quarter of 2007, TAC totaled $1.15 billion, or 30% of advertising revenues.

Google reports operating income, net income, and earnings per share (EPS) on a GAAP and non-GAAP basis. The non-GAAP measures are described below and are reconciled to the corresponding GAAP measures in the accompanying financial tables.

• GAAP operating income for the second quarter of 2007 was $1.10 billion, or 29% of revenues. This compares to GAAP operating income of $1.22 billion, or 33% of revenues, in the first quarter of 2007. Non-GAAP operating income in the second quarter of 2007 was $1.35 billion, or 35% of revenues. This compares to non-GAAP operating income of $1.41 billion, or 38% of revenues, in the first quarter of 2007.

• GAAP net income for the second quarter of 2007 was $925 million as compared to $1.0 billion in the first quarter of 2007. Non-GAAP net income in the second quarter of 2007 was $1.12 billion, compared to $1.16 billion in the first quarter of 2007.

• GAAP EPS for the second quarter of 2007 was $2.93 on 315 million diluted shares outstanding, compared to $3.18 for the first quarter of 2007 on 315 million diluted shares outstanding. Non-GAAP EPS in the second quarter of 2007 was $3.56, compared to $3.68 in the first quarter of 2007.

• Non-GAAP operating income, non-GAAP operating margin, non-GAAP net income, and non-GAAP EPS are computed net of stock-based compensation (SBC). In the second quarter of 2007, the charge related to SBC was $242 million as compared to $184 million in the first quarter of 2007. Tax benefits related to SBC have also been excluded from these non-GAAP measures. The tax benefit related to SBC was $43 million in the second quarter of 2007 and $27 million in the first quarter of 2007. Reconciliations of non-GAAP measures to GAAP operating income, operating margin, net income, and EPS are included at the end of this release.

The complete Second Quarter 2007 Results can be found at http://www.google.com/intl/en/press/pressrel/revenues_q207.html.

Entry Filed under: Google