Slide 1: Q3 2013 Quarterly Earnings Summary
Q3 2013 Quarterly Earnings Summary Google Confidential and Proprietary
Slide 2: Q3 2013 Highlights
Q3 2013 Highlights Financial Highlights: Operational Highlights: Consolidated revenues growth of 12% Y/Y and 6% Q/Q. Strong financial metrics: revenue growth and cash flow. Consolidated revenues were $14.89 billion. Continuing to invest in three major areas of focus: ● Google segment revenues were $
Slide 3: Consolidated Quarterly Revenues
Consolidated Quarterly Revenues Revenues by revenue source U.S. vs. International (1 ) Q3'13 Y/Y Growth = 12% Q3'13 Q/Q Growth = 6% (1) Please note, starting from Q3’13 because of the eliminations, the sum of the segment revenues will not equal the consolidated revenues unless the eliminations are t
Slide 4: Traffic Acquisition Costs
Traffic Acquisition Costs Month 2011 Google Confidential and Proprietary 4
Slide 5: Consolidated Costs and Expenses
Consolidated Costs and Expenses GAAP Q3 2012 Q2 2013 Q3 2013 $ in millions As % of revenues $ in millions As % of revenues $ in millions As % of revenues Cost of Revenues $5,955 44% $6,063 43% $6,413 43% Research & Development $1,879 14% $1,987 14% $2,017 14% Sales & Marketing $1,710 13% $1,735 12%
Slide 6: Profitability
Profitability Consolidated GAAP ($ in millions) Q3 2012 Q2 2013 Q3 2013 Income from Operations $2,740 $3,123 $3,444 Operating margin 21% 22% 23% Net Income from continuing operations $2,158 $2,554 $2,955 Net Income from discontinued operations $18 $674 $15 Net Income $2,176 $3,228 $2,970 EPS (Dilute
Slide 7: Segment Profitability
Segment Profitability Google Segment ($ in millions) Q3 2012 Q2 2013 Q3 2013 Income from Operations (Segment) $3,951 $4,208 $4,635 Operating margin (1) 34% 32% 34% Motorola Mobile Segment ($ in millions) Q3 2012 Q2 2013 Q3 2013 Loss from Operations (Segment) $(192) $(218) $(248) Operating margin (2)
Slide 8: Consolidated Free Cash Flow
Consolidated Free Cash Flow Non-GAAP ($ in millions) Q3 2012 (1) Q2 2013 (2) Q3 2013 Net cash provided by operating activities $4,004 $4,705 $5,083 Less: Purchases of property and equipment $(872) $(1,611) $(2,289) Free cash flow $3,132 $3,094 $2,794 (1) Including Motorola Home. (2) Including Motoro
Slide 9: Overview of Q3 2013 OI&E and FX
Overview of Q3 2013 OI&E and FX ● In Q3, we recognized $24M of Interest and Other Income, net. ● In Q3, we recognized $201M of interest income earned on our investments, $26M in net realized losses, and $22M of interest expense on our long-term debt. ● We recognized $153M of foreign exchange loss of
Slide 10: Google Segment - Revenues by Geography
Google Segment - Revenues by Geography ($ in millions) Q3 2012 Q2 2013 Q3 2013 United States $5,416 $5,896 $6,098 United Kingdom $1,216 $1,321 $1,389 Rest of the world $4,894 $5,890 $6,285 Total Revenues $11,526 $13,107 $13,772 Month 2011 Google Confidential and Proprietary 10
Slide 11: Google Segment - International Revenues excluding Hedging and FX Impact (Y/Y)
Google Segment - International Revenues excluding Hedging and FX Impact (Y/Y) ($ in millions) Q3 2012 Q3 2013 ($ in millions) Q2 2012 Q2 2013 UK revenues (GAAP) $1,216 $1,389 UK revenues (GAAP) $1,175 $1,321 exclude: exclude: a) f/x impact on Q3'13 revenues n/a 19 a) f/x impact on Q2'13 revenues n/a
Slide 12: Google Segment - International Revenues excluding Hedging and FX Impact (Q/Q)
Google Segment- International Revenues excluding Hedging and FX Impact (Q/Q) ($ in millions) Q2 2013 Q3 2013 ($ in millions) Q1 2013 Q2 2013 UK revenues (GAAP) $1,321 $1,389 UK revenues (GAAP) $1,387 $1,321 exclude: exclude: a) f/x impact on Q3'13 revenues n/a (13) a) f/x impact on Q2'13 revenues n/
Slide 13: Table 1 - Reconciliations of consolidated GAAP to non-GAAP costs and expenses
Table 1 - Reconciliations of consolidated GAAP to non-GAAP costs and expenses Q3 2012 Q2 2013 Q3 2013 $ in millions As a % of revenues (1) $ in millions As a % of revenues (1) $ in millions As a % of revenues (1) Cost of Revenues (GAAP) $5,955 44% $6,063 43% $6,413 43% Less: Non-GAAP adjustments (2)
Slide 14: Table 2 - Reconciliations of non-GAAP consolidated results of operations measures
Table 2 - Reconciliations of non-GAAP consolidated results of operations measures to the nearest comparable GAAP measures Consolidated ($ in millions) Q3 2012 Q2 2013 Q3 2013 Income from Operations (GAAP) $2,740 $3,123 $3,444 Operating margin (1) 21% 22% 23% Add: Stock-based compensation expense (SB