Google Inc. (GOOG) Profits Explodes and Exceeds All Expectations
Google Inc. (NASDAQ:GOOG - News) today announced financial results for the quarter ended March 31, 2007.
"The global growth of our core search and ads business and our focus on building our partnerships drove our strong results in the quarter," said Eric Schmidt, CEO of Google. "We continued to expand our worldwide footprint, adding important new partners and growing our platform to increase our ability to deliver targeted and measurable ads. The ongoing expansion of our network allows us to improve the user experience through new opportunities and programs."
Q1 Financial Summary
Google reported revenues of $3.66 billion for the quarter ended March 31, 2007, an increase of 63% compared to the first quarter of 2006 and an increase of 14% compared to the fourth quarter of 2006. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC. In the first quarter of 2007, TAC totaled $1.13 billion, or 31% 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 first quarter of 2007 was $1.22 billion, or 33% of revenues. This compares to GAAP operating income of $1.06 billion, or 33% of revenues, in the fourth quarter of 2006. Non-GAAP operating income in the first quarter of 2007 was $1.41 billion, or 38% of revenues. This compares to non-GAAP operating income of $1.20 billion, or 37% of revenues, in the fourth quarter of 2006.
GAAP net income for the first quarter of 2007 was $1.0 billion as compared to $1.03 billion in the fourth quarter of 2006. Non-GAAP net income in the first quarter of 2007 was $1.16 billion, compared to $997 million in the fourth quarter of 2006.
GAAP EPS for the first quarter of 2007 was $3.18 on 315 million diluted shares outstanding, compared to $3.29 for the fourth quarter of 2006 on 313 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2007 was $3.68, compared to $3.18 in the fourth quarter of 2006.
Non-GAAP operating income, non-GAAP net income, and non-GAAP EPS are computed net of stock-based compensation (SBC). In addition, in the fourth quarter of 2006, we excluded from the calculation of non-GAAP net income and EPS tax benefits of $90 million related to the advanced pricing agreement we entered into with the IRS in December 2006 and $43 million related to the 2006 R&D tax credit. In the first quarter of 2007, the charge related to SBC was $184 million as compared to $134 million in the fourth quarter of 2006. Tax effects related to SBC have also been excluded from these non-GAAP measures. The tax benefit related to SBC was $27 million in the first quarter of 2007 and $35 million in the fourth quarter of 2006. Reconciliations of non-GAAP measures to GAAP operating income, net income, and EPS are included at the end of this release.
Q1 Financial Highlights
Revenues -- Google reported revenues of $3.66 billion for the quarter ended March 31, 2007, representing a 63% increase over first quarter 2006 revenues of $2.25 billion and a 14% increase over fourth quarter 2006 revenues of $3.21 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC.
"The global growth of our core search and ads business and our focus on building our partnerships drove our strong results in the quarter," said Eric Schmidt, CEO of Google. "We continued to expand our worldwide footprint, adding important new partners and growing our platform to increase our ability to deliver targeted and measurable ads. The ongoing expansion of our network allows us to improve the user experience through new opportunities and programs."
Q1 Financial Summary
Google reported revenues of $3.66 billion for the quarter ended March 31, 2007, an increase of 63% compared to the first quarter of 2006 and an increase of 14% compared to the fourth quarter of 2006. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC. In the first quarter of 2007, TAC totaled $1.13 billion, or 31% 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 first quarter of 2007 was $1.22 billion, or 33% of revenues. This compares to GAAP operating income of $1.06 billion, or 33% of revenues, in the fourth quarter of 2006. Non-GAAP operating income in the first quarter of 2007 was $1.41 billion, or 38% of revenues. This compares to non-GAAP operating income of $1.20 billion, or 37% of revenues, in the fourth quarter of 2006.
GAAP net income for the first quarter of 2007 was $1.0 billion as compared to $1.03 billion in the fourth quarter of 2006. Non-GAAP net income in the first quarter of 2007 was $1.16 billion, compared to $997 million in the fourth quarter of 2006.
GAAP EPS for the first quarter of 2007 was $3.18 on 315 million diluted shares outstanding, compared to $3.29 for the fourth quarter of 2006 on 313 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2007 was $3.68, compared to $3.18 in the fourth quarter of 2006.
Non-GAAP operating income, non-GAAP net income, and non-GAAP EPS are computed net of stock-based compensation (SBC). In addition, in the fourth quarter of 2006, we excluded from the calculation of non-GAAP net income and EPS tax benefits of $90 million related to the advanced pricing agreement we entered into with the IRS in December 2006 and $43 million related to the 2006 R&D tax credit. In the first quarter of 2007, the charge related to SBC was $184 million as compared to $134 million in the fourth quarter of 2006. Tax effects related to SBC have also been excluded from these non-GAAP measures. The tax benefit related to SBC was $27 million in the first quarter of 2007 and $35 million in the fourth quarter of 2006. Reconciliations of non-GAAP measures to GAAP operating income, net income, and EPS are included at the end of this release.
Q1 Financial Highlights
Revenues -- Google reported revenues of $3.66 billion for the quarter ended March 31, 2007, representing a 63% increase over first quarter 2006 revenues of $2.25 billion and a 14% increase over fourth quarter 2006 revenues of $3.21 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC.
Labels: GOOG, Google Inc.
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