Alphabet's revenue climbed 24% year over year to $32.3 billion, which translated to adjusted (non-GAAP) net income of $9.70 per share. Consensus estimates predicted higher earnings of $9.98 per share on lower revenue of $31.84 billion.
That's not to say Alphabet is displeased with its performance. As I wrote a few days ago, keep in mind that Alphabet doesn't provide specific quarterly financial guidance. And CFO Ruth Porat noted the "business is driving great growth," adding during the subsequent conference call that Google sites enjoyed a "very strong performance" driven by broad growth in mobile search, desktop search, and YouTube. Network member sites also delivered healthy growth on programmatic advertising strength.
All told, Google's advertising revenue climbed nearly 22% year over year to $27.2 billion. And non-advertising revenue at Google jumped 38% to just under $5 billion, led by demand for Google Play, cloud products, and its burgeoning hardware business.
Finally, Revenue at Google's "Other Bets" segment -- comprised primarily of high-potential, early stage businesses like Nest (smart home), Fiber (high-speed internet), Verily (life sciences), Waymo (self-driving vehicles), and X (moonshot initiatives) -- grew 56% to $409 million. But Other Bets also incurred a quarterly operating loss of $916 million. That was smaller than its operating loss of $1.088 billion in last year's fourth quarter, and was more than offset by Google's tremendous operating profit of $8.763 billion.
Here again, Alphabet opted not to provide specific revenue or earnings guidance looking forward. Rather, Porat insisted Alphabet's framework for capital allocation will remain unchanged, focusing first on driving organic growth in the business, then on potential complimentary uses for cash including capital returns. To the latter end, Alphabet's board approved an additional repurchase authorization for up to $8,589,869,056 of its Class C capital stock (with the exact figure chosen to represent another delightfully nerdy math joke).
All things considered, though the market's initial reaction to the bottom-line miss may not reflect as much, I think this was a stellar quarter from Alphabet that should leave investors pleased with its position.