Google Tops Second Quarter Earnings Expectations

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Last Update: 15-Jul-11 10:32 ET

Google (GOOG $592.28 +63.34) reported second quarter earnings of $8.74 per share, excluding non-recurring items, $0.91 better than the Capital IQ Consensus Estimate of $7.83.

Net revenue (subtracting traffic acquisition costs -- TAC) rose 36% year/year to $6.92 billion versus the $6.55 billion consensus; gross rev +23.9% year/year to $9.03 billion versus the $8.63 billion consensus.

Non-GAAP operating income in the second quarter of 2011 was $3.32 billion, or 37% of revenues. This compares to non-GAAP operating income of $2.67 billion, or 39% of revenues, in the second quarter of 2010 and 38% in Q1. Operating expenses, other than cost of revenues, were $2.97 billion in the second quarter of 2011, or 33% of revenues, compared to $1.99 billion in the second quarter of 2010, or 29% of revenues.

Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our AdSense partners, increased approx.12% over the second quarter of 2010 and increased ~6% over the first quarter of 2011. Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased ~18% over the second quarter of 2010 and decreased ~2% over the first quarter of 2011. As of June 30, 2011, cash, cash equivalents, and marketable securities were $39.1 billion. Net headcount growth (excluding approximately 450 employees hired as part of the acquisition of ITA Software) was similar to the first quarter of 2011.