Analyst Conference Summary

conference date: October 18, 2007 @ 1:30 PM PT
for quarter ending: September 30, 2007 (3rd quarter 2007)

Forward-looking statements

Unfortunately, by the time I got around to having time to listen to this conference on Saturday, Google's links to the audio file were not working. One of their now nearly 16,000 geniuses screwed up, I guess. What is below is from the press release. I don't know if I can get back to this one for a listen. It's good to know they are growing and need more servers, processors, routers, twenty-somethings and all that.

Overview: Another quarter of rapid growth in ad revenues and profits.

Basic data:

Revenues were $4.23 billion, up 9% sequentially and up 57% from $2.69 billion year-earlier.

Net income was $1.07 billion, up 16% sequentially from $925 million in Q2 2007 and up 46% from $733 million in the year-earlier quarter.

EPS (earnings per share) were $3.38, up 15% sequentially from $2.93 and up 61% from $2.36 year-earlier.

Guidance:

Does not give guidance.

Conference Highlights:

TAC (traffic acquisition costs) were $1.22 billion, or 29% of advertising revenues. Most TAC costs is paid to AdSense partners.

Operating income was $1.32 billion, or 31% of revenues. Non-GAAP opeting income was $1.52 billion.

Non-GAAP net income was $1.24 billion. Non-GAAP EPS was $3.91. Stock-based compenation expense was $198 million.

Google sites revenues were $2.73 billion, 65% of total revenue, and up 10% sequentially from $2.49 billion in Q2.

Google network revenues (partners sites in AdSense programs) were $1.45 billion, 34% of total revenues. This was up 8% from Q2.

International revenues were $2.03 billion for 48% of total revenues.

Paid clicks increased 45% from Q3 2006 and 5% sequentially.

Cost of revenues (other than TAC) were $441 million. Operating expenses $1.25 billion, which was 30% of revenues. Effective tax rate was 27.3%.

Net cash provided by operating activities was $1.63 billion. Capital expenditures were $553 million. Free cash flow was $1.08 billion. Cash and equivalents ended at $13.1 billion.

Full time employment ended at 15,916.

Q&A:

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