Digital Edition

SYS-CON.TV
Google Revenues Up 98% Year Over Year; "We Had an Excellent Quarter," Says CEO
Eric Schmidt Announced Financial Results for the Quarter Ended June 30, 2005

"We had an excellent quarter. We continued to innovate, we continued to execute and we stayed focused on our users," said Google's CEO Eric Schmidt (pictured), as Google Inc on Thursday announced financial results for the quarter ended June 30, 2005, including record revenues of $1.384 billion for the quarter  - up 98% year over year

"Google had another solid performance," Schmidt said, understatedly.

Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs or TAC, the portion of revenues shared with partners.

Financial highlights for the quarter were as follows:

Revenues - Revenues in the second quarter totaled a record $1.384 billion, representing a 10% increase over the first quarter of 2005 and a 98% year-over-year increase. This revenue increase reflects strong traffic and monetization growth in the quarter as well as advertisers' growing recognition of the Internet as an effective advertising medium.

Google-Sites Revenues - Google-owned sites generated $737 million or 53% of total revenues. This represents an increase of 115% over the second quarter of 2004.

The Google Network - Revenues generated on Google's partner sites, through AdSense programs, contributed $630 million, or 46% of total revenues, an 82% increase over the Network revenues generated in the same quarter last year.

TAC - Traffic Acquisition Costs, the portion of revenues shared with Google's partners, increased to $494 million. This compares to total payments to partners of $277 million in the second quarter of 2004.

Income from Operations - Income from operations in the second quarter, on a GAAP basis, was $476 million or 34.4% of revenues, and included a non-cash charge of $47 million for stock-based compensation. This compares to income from operations of $171 million or 24.4% of revenues in the second quarter of 2004, when the stock-based compensation charge was $75 million. This improvement in operating margins was primarily because of decreases in TAC, Sales and Marketing expense and stock-based compensation expense as a percentage of revenues, offset by increases in R&D, other cost of revenues and G&A expense.

Income Taxes - Google recorded a provision for income taxes of $153 million in the second quarter of 2005, an effective tax rate of 31% as compared to a $90 million provision for income taxes and a 53% effective tax rate in the second quarter of 2004. We continue to expect that the effective tax rate for 2005 will be less than 30%. However if future revenues recognized by Google's Irish subsidiary are not as proportionately significant as expected, Google's effective tax rate will be higher than expected.

Net Income - Net income on a GAAP basis increased to $343 million or 24.8% of revenues in the second quarter of 2005 as compared to $79 million or 11.3% of revenues in the second quarter of 2004. Earnings on a per share diluted basis were $1.19 in the second quarter of 2005 as compared to $0.30 in the second quarter of 2004.

Cash Flow - Net cash provided by operating activities increased 283% to $625 million for the three months ended June 30, 2005 from $163 million for the three months ended June 30, 2004. Free cash flow is an alternative non-GAAP measure of liquidity to GAAP net cash provided by operating activities and is calculated as operating cash flows less capital expenditures. Capital expenditures were approximately $158 million in the three months ended June 30, 2005 as compared to $96 million in the three months ended June 30, 2004. Free cash flow for the three months ended June 30, 2005 totaled $467 million as compared to $67 million for the same period in 2004, an increase of approximately 600%.

Adjusted EBITDA - Adjusted EBITDA is defined as income before interest, taxes, depreciation, amortization, the non-cash stock-based compensation charge and in-process R&D. It is another alternative measure of liquidity to GAAP net cash provided by operating activities. Adjusted EBITDA increased to approximately $590 million in the second quarter of 2005 (or 43% of revenues) from $ 278 million (or 40% of revenues) in the second quarter of 2004.

As of June 30, 2005, Google had a cash, cash equivalents and marketable securities balance of $2.9BN.

On a worldwide basis, Google employed 4,183 full time employees as of June 30, 2005, up from 3,482 as of March 31, 2005.




About Jeremy Geelan
Jeremy Geelan is Chairman & CEO of the 21st Century Internet Group, Inc. and an Executive Academy Member of the International Academy of Digital Arts & Sciences. Formerly he was President & COO at Cloud Expo, Inc. and Conference Chair of the worldwide Cloud Expo series. He appears regularly at conferences and trade shows, speaking to technology audiences across six continents. You can follow him on twitter: @jg21.

In order to post a comment you need to be registered and logged in.

Register | Sign-in

Reader Feedback: Page 1 of 1

Here's the key metric:

>Google employed 4,183 full time employees >as of June 30, 2005, up from 3,482 as of >March 31, 2005.

That's over 700 hires in one year!!!




ADS BY GOOGLE
Subscribe to the World's Most Powerful Newsletters

ADS BY GOOGLE

Andi Mann, Chief Technology Advocate at Splunk, is an accomplished digital business executive with e...
Most DevOps journeys involve several phases of maturity. Research shows that the inflection point wh...
DXWordEXPO New York 2018, colocated with CloudEXPO New York 2018 will be held November 11-13, 2018, ...
Dynatrace is an application performance management software company with products for the informatio...
@DevOpsSummit at Cloud Expo, taking place November 12-13 in New York City, NY, is co-located with 22...
DevOpsSummit New York 2018, colocated with CloudEXPO | DXWorldEXPO New York 2018 will be held Novemb...
Bill Schmarzo, author of "Big Data: Understanding How Data Powers Big Business" and "Big Data MBA: D...
CI/CD is conceptually straightforward, yet often technically intricate to implement since it require...
The now mainstream platform changes stemming from the first Internet boom brought many changes but d...
CloudEXPO New York 2018, colocated with DXWorldEXPO New York 2018 will be held November 11-13, 2018,...
Bill Schmarzo, Tech Chair of "Big Data | Analytics" of upcoming CloudEXPO | DXWorldEXPO New York (No...
DXWorldEXPO | CloudEXPO are the world's most influential, independent events where Cloud Computing w...
DXWorldEXPO LLC announced today that Telecom Reseller has been named "Media Sponsor" of CloudEXPO | ...
In his keynote at 19th Cloud Expo, Sheng Liang, co-founder and CEO of Rancher Labs, discussed the te...
Enterprises are striving to become digital businesses for differentiated innovation and customer-cen...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news an...
To Really Work for Enterprises, MultiCloud Adoption Requires Far Better and Inclusive Cloud Monitori...
A valuable conference experience generates new contacts, sales leads, potential strategic partners a...
Containers and Kubernetes allow for code portability across on-premise VMs, bare metal, or multiple ...
Everyone wants the rainbow - reduced IT costs, scalability, continuity, flexibility, manageability, ...