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Alphabet Announces Second Quarter 2018 Results [pdf]

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Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#91

Post by jacques_chester »

tqi wrote: post #89
jacques_chester wrote: post #48

Earlier quoted context omitted.

Revenue: sales recorded. This might or might not represent cash coming through the door in this quarter, but it represents that there is an agreement for cash and goods/services to change hands. Operating income: Money left over after you subtract the costs of operating the business and making the sale. In a manufacturing firm, for example, you would subtract the cost of the materials in the goods sold. For Google th…

"Revenue: sales recorded." Small clarification, this is sales recognized. For example, if your customer signs a 2 year service agreement at the start of a quarter, the revenue reported that quarter should be 1/8th of the total contract amount (assuming you are recognizing revenue at a flat rate).

Thankyou, this is an important correction. I expect a number of Google's contracts will be structured this way.

For those following along, spending some time with an introductory financial accounting book or textbook is a very useful way to understand a lot of business behaviour. I took a 101-level accounting course during my computer science degree and it has proved to be a very useful thing to have learned about.

Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#92

Post by scarface74 »

mudil wrote: post #42
DEADBEEFC0FFEE wrote: post #38

Earlier quoted context omitted.

Doesn't that rather support the notion that personalised, contextual ads are more effective?

There is this important little thing called privacy of the individual, that FB and Google monopolized and actively violate.

Most of the other information Facebook has about people is willfully given to them - your age, gender, likes, checkins, etc.

Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#93

Post by PaulRobinson »

mbesto wrote: post #90
tequila_shot wrote: post #2

Honest question: First time reading quarter results. How do I interpret these results?

The most important number and the least spoken about: free cash flow. They had $4.6B this quarter. In laymen's terms that means - at the end of this quarter they have an extra $4.6B of capital sitting around to deployed for investment (employee bonuses, acquisitions, capital expenditures, etc). If you're interested in the finance behind software companies, highly recommend following Tren Griffin: https://twitter.com/…

I'm struggling to see that number in the report. Is this something we need to go diving in for and calculate? I note from the twitter post you put up (thanks for the tip, now following Tren), that FCF is often obscured. Tips on how to find it/work it out?

Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#94

Post by corv »

TekMol wrote: post #18
mudil wrote: post #6

Mass surveillance of billions of people pays off handsomely. Google and Facebook are the only two businesses that prosper on ads, while your local newspapers, specialized websites, and journalism in general are dying.

I'm not sure it's the surveillance that makes Google earn so much. I would think the main reason is that search traffic is so valuable to advertisers.

Not only web searches.

Tracking Google Maps journeys, YouTube, Google Analytics across most of the web, a major portion of global email communications, Hangouts, Google Drive, etc, the list goes on and on.

Immensely valuable data that is able to predict trends and behaviour of both businesses and people in many instances

Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#95

Post by notatoad »

tim333 wrote: post #71
panarky wrote: post #44

Earlier quoted context omitted.

26% is a crazy high growth rate for a company with 89,000 employees. Even more amazing is that it's actually accelerating: Q2 2018 vs. 2017 +26% Q2 2017 vs. 2016 +21% Q2 2016 vs. 2015 +21% Q2 2015 vs. 2014 +11% Q2 2014 vs. 2013 +21% Q2 2013 vs. 2012 +11% I don't think I've ever seen this with another big company. Truly astounding.

I guess maybe the restructuring from Google to Alphabet worked. The idea was based on Berkshire Hathaway, another company with unusual growth. ( http://www.berkshirehathaway.com/letters/2017ltr.pdf )

that seems like a strange conclusion, since a huge majority of the revenue and growth is still coming from Google.

Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#96

Post by anonymous5133 »

philipodonnell wrote: post #23

Revenue up 26% YOY (good but expected). Big one for me is advertising segment revenue as % of total segment revenue, down to 86.3% from 87.4%, which is good, they have got to diversify away from ads eventually. Disappointing to see the "other bets" still at a paltry $145M and losses are growing faster. Also no mentioned whatsoever of cloud performance. Employee count up 15% but Wow, that was a big fine though.

Yeah, I think the ad spending as % of revenue is a serious problem. When the economy goes into the next recession I can see google getting crushed as companies cut their ad spend.

Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#97

Post by std_throwaway »

Johnie wrote: post #62
panarky wrote: post #44

Earlier quoted context omitted.

26% is a crazy high growth rate for a company with 89,000 employees. Even more amazing is that it's actually accelerating: Q2 2018 vs. 2017 +26% Q2 2017 vs. 2016 +21% Q2 2016 vs. 2015 +21% Q2 2015 vs. 2014 +11% Q2 2014 vs. 2013 +21% Q2 2013 vs. 2012 +11% I don't think I've ever seen this with another big company. Truly astounding.

Patrick Pichette always had a saying internally that 20% is the magic number. If you can keep growing 20% YoY, investors will let you do whatever you want.

I fear the times when they can't achieve those 20% and the winds start to change massively.

Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#98

Post by lgleason »

Interesting. If you look at the Operating income with fines they are actually down from last year. If you look at it without fines it's 14% growth...

Given the increased scrutiny and the regulatory headwinds I think the with fines is probably a more accurate number. If you want to split it you could call it stagnant.

They are hiring a lot of people, but from from I've heard and seen the hiring standards have been reduced from what they used to be. A lot of the spending is to make Wall Street think they have something beyond search but it is still the cash cow the keeps it going...

Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#99

Post by rimliu »

AznHisoka wrote: post #8
lazharichir wrote: post #4

Strong headcount growth versus other FANG-like companies.

Is that something that's usually rewarded by Wall Street? I would think being more efficient (ie. making more money with less employees) would be viewed as more successful.

There is a principle (some claim it holds true in pretty much every case) that in a company of N people only square root of N are doing all the work. So if you are a 4 person company you need to hire 12 more to double your output. if you are a company with 10 000 employees you will need to hire 30 000 more to double your output :)

Re: Alphabet Announces Second Quarter 2018 Results [pdf]

#100

Post by hndamien »

mudil wrote: post #42
DEADBEEFC0FFEE wrote: post #38

Earlier quoted context omitted.

Doesn't that rather support the notion that personalised, contextual ads are more effective?

There is this important little thing called privacy of the individual, that FB and Google monopolized and actively violate.

You can use Duck Duck Go
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