• Alphabet, Google’s parent company, reported its third-quarter results on Tuesday.
• The company beat its revenue, EPS, advertising business and Google Cloud revenue, which grew 35% year over year.
• CEO Sundar Pichai said the company’s investments in AI are “paying off.”

Google Parent company Alphabet reported better-than-expected third-quarter results after the closing bell Tuesday.

Google Cloud revenue rose 35% year over year to $11.4 billion, driven by “accelerated growth” in the company’s AI products, the company said.

The company’s shares rose more than 5% after hours.

Here are the key numbers for the third quarter compared to analyst estimates:

• Earnings per share: $2.12 versus $1.83 expected
• Income: $88.27 billion versus $86.44 billion expected
• Google Advertising: $65.9 billion versus $65.5 billion
• YouTube ad revenue: $8.92 billion versus $8.89 billion expected
• Google Cloud revenue: $11.35 billion versus $10.79 billion expected

Alphabet and Google CEO Sundar Pichai said the company’s investments in AI are “paying off.”

“In the Cloud, our AI solutions help drive deeper product adoption with existing customers, attract new customers and win larger contracts,” added Pichai. “And YouTube’s total ad and subscription revenue surpassed $50 billion for the first time in the last four quarters.”

Pichai provided an update on the evolution of the company’s search product, which has deployed AI-generated answers called AI Overview in Google results. AI results now reach more than 1 billion users on a monthly basis, he said, and ads in AI Overview “are working well.”

Google said its employees are also increasingly using AI products at work.

“Today, more than a quarter of all new code at Google is generated by AI and then reviewed and accepted by engineers,” Pichai said.

The search giant’s profits came less than three months after a Federal judge rules company violated antitrust law by illegally maintaining a research monopoly. Google is also fighting against a separate antitrust battle on its adtech activity. Possible dissolution looms over the company’s head and lengthy legal battles are expected.

Pichai briefly addressed the legal challenges during Tuesday’s call.

“We plan to vigorously defend these cases, and some of the DOJ’s early proposals have been far-reaching,” he said. He added that, if approved, the proposed remedies “could have unintended consequences, particularly on the dynamic technology sector and on American leadership in this sector.”

The company also announced a major reorganization in October as part of its growing AI efforts, moving the Gemini app team under the Google DeepMind team led by Demis Hassabis. Pichai likened the reorganization to a neural network “forming new synapses.”

“Google’s results this quarter show that it can perform despite serious regulatory threats to its advertising business,” Evelyn Mitchell-Wolf, senior analyst at Emarketer, told Business Insider.

“As competition intensifies around its core search business, Google’s AI-driven defense is locked in, and it enters the holiday season well-positioned to win ad dollars,” Mitchell added. -Wolf.

Alphabet said its fully autonomous vehicle company, Waymo, reached 150,000 paid rides per week, totaling 150,000 paid rides per week. over a million fully autonomous miles. Pichai said it was “the first time an AV company has achieved this type of mainstream usage.”

“Waymo has multiple routes to market, and with its sixth-generation system, it has reduced unit costs much more significantly without compromising safety,” Pichai said.

The CEO said Alphabet is working on additional Waymo partnerships with network partners and fleet managers as it looks to scale.

When asked if the company had seen any impact on its business ahead of the US presidential election, Google’s chief business officer, Philipp Schindler, said the company had seen “a slight tailwind from election-related ad spend in the third quarter, which was a bit more pronounced in YouTube ads. »