Google’s Q2 Revenue Of $15.96B Beats, But Its Non-GAAP EPS Of $6.08 Disappoints

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Today after the bell Google reported its second quarter financial results, including net revenue (ex-TAC) of $12.67 billion, and $6.08 in non-GAAP earnings per share. Google gross revenue for the period came in at $15.96 billion

Analysts had expected that Google would report $12.32 billion in ex-TAC (net) revenue, $15.62 billion in gross revenue, and earnings per share of $6.25. In its sequentially preceding quarter, Google had net revenue of $12.2 billion and earnings per share of $6.27.

Down more than 1.5 percent in regular trading, Google is up a fraction following its mixed earnings. Investors appear to be more enthused by its revenue beat than its profit miss. However, picking up a slim 0.74 percent after-hours isn’t much of a pop.

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Google also today announced that Nikesh Arora, its chief business officer, is leaving Google to join SoftBank as its vice chairman of the company and CEO of SoftBank Internet and Media. He had been with Google since 2004 and held numerous roles there, including serving as president of its Global Sales Operations and Business Development from 2009 to 2010, its president for Europe, Middle East and Africa from 2007 to 2009 and as its vice president of Europe Operations from 2004 to 2007. He will be replaced by Omid Kordestani, Google’s business founder and senior adviser to the office of the CEO and founders at Google.

Google’s GAAP net income for the period totaled $3.42 billion. The company ended the period with cash and equivalents of $58.72 billion. Google is among the upper-cadre of technology firms in terms of its cash position — it has reserves sufficient to allow for any internal investment that it wants, and could purchase most public companies.

Paid clicks advanced 25 percent on a year-over-year basis, or 2 percent on a sequential quarter basis. Cost per click slid 6 percent year-over-year. That compares favorably to Google’s 9 percent year-over-year fall that it recorded in its sequentially previous period.

Revenue generated from its own sites totaled $10.94 billion in the quarter, up 23 percent year-over-year, representing 69 percent of Google’s total revenue.  Top line generated from its network segment was $3.42 billion, up 7 percent on a year-over-year basis.

The company’s spend on acquiring traffic was up in terms of total dollars on a year-over-year bassi — $3.29 billion over a previous $3.01 billion — but as a percentage of revenue is down from 25 percent to 23 percent.

Google generated $9.33 billion in revenue outside of the United States, or 58 percent of its total revenue.

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For you data wonks, Google’s operating expenses were 35 percent of revenue in the quarter, up 1 percent compared to 2013, and its cost of revenue was a slim 18 percent in the period.

Google’s strong revenue growth but slimmer-than-expected profits could cause investors to worry that the company’s expense controls aren’t in ship-shape. We’ll be tuning into Google’s call shortly, and will have more when the company answers questions regarding its results.