Google Reports Second Quarter Earnings – Is “Very Pleased” With The Results

Supergiant Google has just reported their second quarter financials, showing rising revenue and profit on a year over year basis. In the words of Eric Schmidt: “Google had a strong second quarter. Solid growth in our core business and very strong growth in our emerging businesses drove 24% revenue growth year over year.”

Revenue for Google in the second quarter was $6.82 billion, a 24% increase over second quarter revenues from the year prior, when the company brought in $5.52 billion. Google’s operating income was $2.37 billion, some 35% of revenues. Net income was $1.84 billion, a gain over the $1.48 billion in the same quarter of 2009.

Google did not match analyst expectations, which were $6.52 a share. The company report non-GAAP EPS of $6.45 a share. The company said that it was “very pleased” with the quarter.

Highlights from Google’s official statement:

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Revenues – Google reported revenues of $6.82 billion in the second quarter of 2010, representing a 24% increase over second quarter 2009 revenues of $5.52 billion. Google reports its revenues, consistent with GAAP, on a gross basis without deducting TAC.

Google Sites Revenues – Google-owned sites generated revenues of $4.50 billion, or 66% of total revenues, in the second quarter of 2010. This represents a 23% increase over second quarter 2009 revenues of $3.65 billion.

Google Network Revenues – Google’s partner sites generated revenues, through AdSense programs, of $2.06 billion, or 30% of total revenues, in the second quarter of 2010. This represents a 23% increase from second quarter 2009 network revenues of $1.68 billion.

International Revenues – Revenues from outside of the United States totaled $3.53 billion, representing 52% of total revenues in the second quarter of 2010, compared to 53% in the first quarter of 2010 and 53% in the second quarter of 2009. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the first quarter of 2010 through the second quarter of 2010, our revenues in the second quarter of 2010 would have been $176 million higher. Excluding gains related to our foreign exchange risk management program, had foreign exchange rates remained constant from the second quarter of 2009 through the second quarter of 2010, our revenues in the second quarter of 2010 would have been $24 million lower.

Revenues from the United Kingdom totaled $770 million, representing 11% of revenues in the second quarter of 2010, compared to 13% in the second quarter of 2009.
In the second quarter of 2010, we recognized a benefit of $79 million to revenues through our foreign exchange risk management program, compared to $124 million in the second quarter of 2009.
Paid Clicks – Aggregate paid clicks, which include clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 15% over the second quarter of 2009 and decreased approximately 3% over the first quarter of 2010.

Cost-Per-Click – Average cost-per-click, which includes clicks related to ads served on Google sites and the sites of our AdSense partners, increased approximately 4% over the second quarter of 2009 and increased approximately 2% over the first quarter of 2010.

TAC – Traffic Acquisition Costs, the portion of revenues shared with Google’s partners, increased to $1.73 billion in the second quarter of 2010, compared to TAC of $1.45 billion in the second quarter of 2009. TAC as a percentage of advertising revenues was 26% in the second quarter of 2010, compared to 27% in the second quarter of 2009.