Google Announces First Quarter 2012 Results and Proposal for New Class of Stock
Proposal Would Effectively Implement 2-for-1 Stock Split While Preserving Long-TermGovernance Structure
MOUNTAIN VIEW, Calif. – April 12, 2012 - Google Inc. (NASDAQ: GOOG) today announced financialresults for the quarter ended March 31, 2012.“Google had another great quarter with revenues up 24% year on year,” said Larry Page, CEO of Google. “We also saw tremendous momentum from the big bets we’ve made in products like Android,Chrome and YouTube. We are still at the very early stages of what technology can do to improvepeople's lives and we have enormous opportunities ahead. It is a very exciting time to be at Google.”Google announced today that its Board of Directors unanimously approved a stock dividend proposaldesigned to preserve the corporate structure that has allowed Google to remain focused on the long term.More information is available on our Investor Relations site, including a letter from our founders LarryPage and Sergey Brin explaining the proposal, and in our forthcoming proxy statement.
Q1 Financial Summary
Google reported revenues of $10.65 billion for the quarter ended March 31, 2012, an increase of 24%compared to the first quarter of 2011. Google reports its revenues, consistent with GAAP, on a grossbasis without deducting traffic acquisition costs (TAC). In the first quarter of 2012, TAC totaled $2.51billion, or 25% of advertising revenues.Google reports operating income, operating margin, net income, and earnings per share (EPS) on aGAAP and non-GAAP basis. The non-GAAP measures, as well as free cash flow, an alternative non-GAAP measure of liquidity, are described below and are reconciled to the corresponding GAAPmeasures at the end of this release.
GAAP operating income in the first quarter of 2012 was $3.39 billion, or 32% of revenues. Thiscompares to GAAP operating income of $2.30 billion, or 27% of revenues, in the first quarter of 2011. Non-GAAP operating income in the first quarter of 2012 was $3.94 billion, or 37% of revenues. This compares to non-GAAP operating income of $3.23 billion, or 38% of revenues, inthe first quarter of 2011.
GAAP net income in the first quarter of 2012 was $2.89 billion, compared to $1.80 billion in the firstquarter of 2011. Non-GAAP net income in the first quarter of 2012 was $3.33 billion, compared to$2.64 billion in the first quarter of 2011.
GAAP EPS in the first quarter of 2012 was $8.75 on 330 million diluted shares outstanding,compared to $5.51 in the first quarter of 2011 on 326 million diluted shares outstanding. Non-GAAPEPS in the first quarter of 2012 was $10.08, compared to $8.08 in the first quarter of 2011.
Non-GAAP operating income and non-GAAP operating margin exclude the expenses related tostock-based compensation (SBC) and a charge related to the resolution of a Department of Justiceinvestigation in the first quarter of 2011. Non-GAAP net income and non-GAAP EPS exclude theexpenses noted above, net of the related tax benefits. In the first quarter of 2012, the chargerelated to SBC and related tax benefits were $556 million and $118 million compared to $432million and $92 million in the first quarter of 2011. In the first quarter of 2011, the charge related tothe resolution of the Department of Justice investigation was $500 million. We recognized no taxbenefit for the charge related to the resolution of the Department of Justice investigation.Reconciliations of non-GAAP measures to GAAP operating income, operating margin, net income,and EPS are included at the end of this release.
Q1 Financial Highlights
Revenues
– Google reported revenues of $10.65 billion in the first quarter of 2012, representing a 24%increase over first quarter 2011 revenues of $8.58 billion. Google reports its revenues, consistent withGAAP, on a gross basis without deducting TAC.
Google Sites Revenues
- Google-owned sites generated revenues of $7.31 billion, or 69% of totalrevenues, in the first quarter of 2012. This represents a 24% increase over first quarter 2011 revenues of $5.88 billion.
Google Network Revenues
- Google’s partner sites generated revenues of $2.91 billion, or 27% of totalrevenues, in the first quarter of 2012. This represents a 20% increase from first quarter 2011 networkrevenues of $2.43 billion.
International Revenues
- Revenues from outside of the United States totaled $5.77 billion, representing54% of total revenues in the first quarter of 2012, compared to 53% in the fourth quarter of 2011 and 53%in the first quarter of 2011. Excluding gains related to our foreign exchange risk management program,had foreign exchange rates remained constant from the fourth quarter of 2011 through the first quarter of 2012, our revenues in the first quarter of 2012 would have been $79 million higher. Excluding gainsrelated to our foreign exchange risk management program, had foreign exchange rates remainedconstant from the first quarter of 2011 through the first quarter of 2012, our revenues in the first quarter of 2012 would have been $67 million higher.
Revenues from the United Kingdom totaled $1.15 billion, representing 11% of revenues in the firstquarter of 2012, compared to 11% in the first quarter of 2011.
In the first quarter of 2012, we recognized a benefit of $37 million to revenues through our foreignexchange risk management program, compared to $14 million in the first quarter of 2011. A reconciliation of our non-GAAP international revenues excluding the impact of foreign exchange andhedging to GAAP international revenues is included at the end of this release.
Paid Clicks
– Aggregate paid clicks, which include clicks related to ads served on Google sites and thesites of our Network members, increased approximately 39% over the first quarter of 2011 and increasedapproximately 7% over the fourth quarter of 2011.
Cost-Per-Click
– Average cost-per-click, which includes clicks related to ads served on Google sites andthe sites of our Network members, decreased approximately 12% over the first quarter of 2011 anddecreased approximately 6% over the fourth quarter of 2011.
TAC
- Traffic acquisition costs, the portion of revenues shared with Google’s partners, increased to $2.51billion in the first quarter of 2012, compared to TAC of $2.04 billion in the first quarter of 2011. TAC as apercentage of advertising revenues was 25% in the first quarter of 2012, compared to 25% in the firstquarter of 2011.The majority of TAC is related to amounts ultimately paid to our Network members, which totaled $2.04billion in the first quarter of 2012. TAC also includes amounts ultimately paid to certain distributionpartners and others who direct traffic to our website, which totaled $468 million in the first quarter of 2012.
Other Cost of Revenues
- Other cost of revenues, which is comprised primarily of data center operational expenses, amortization of intangible assets, content acquisition costs, and credit cardprocessing charges increased to $1.28 billion, or 12% of revenues, in the first quarter of 2012, comparedto $897 million, or 10% of revenues, in the first quarter of 2011.
Operating Expenses
- Operating expenses, other than cost of revenues, were $3.47 billion in the firstquarter of 2012, or 33% of revenues, compared to $3.34 billion in the first quarter of 2011, or 39% of revenues.
Stock-Based Compensation (SBC)
– In the first quarter of 2012, the total charge related to SBC was$556 million, compared to $432 million in the first quarter of 2011.We currently estimate SBC charges for grants to employees prior to March 31, 2012 to be approximately$2 billion for 2012. This estimate does not include expenses to be recognized related to employee stockawards that are granted after March 31, 2012 or non-employee stock awards that have been or may begranted.
Operating Income
– GAAP operating income in the first quarter of 2012 was $3.39 billion, or 32% of revenues. This compares to GAAP operating income of $2.30 billion, or 27% of revenues, in the firstquarter of 2011. Non-GAAP operating income in the first quarter of 2012 was $3.94 billion, or 37% of revenues. This compares to non-GAAP operating income of $3.23 billion, or 38% of revenues, in the firstquarter of 2011.
Interest and Other Income, Net
– Interest and other income, net increased to $156 million in the firstquarter of 2012, compared to $96 million in the first quarter of 2011.
Income Taxes
– Our effective tax rate was 18% for the first quarter of 2012.
Net Income
– GAAP net income in the first quarter of 2012 was $2.89 billion, compared to $1.80 billion inthe first quarter of 2011. Non-GAAP net income was $3.33 billion in the first quarter of 2012, compared to$2.64 billion in the first quarter of 2011. GAAP EPS in the first quarter of 2012 was $8.75 on 330 milliondiluted shares outstanding, compared to $5.51 in the first quarter of 2011 on 326 million diluted sharesoutstanding. Non-GAAP EPS in the first quarter of 2012 was $10.08, compared to $8.08 in the firstquarter of 2011.
Cash Flow and Capital Expenditures
– Net cash provided by operating activities in the first quarter of 2012 totaled $3.69 billion, compared to $3.17 billion in the first quarter of 2011. In the first quarter of 2012, capital expenditures were $607 million, the majority of which was related to IT infrastructureinvestments, including data centers, servers, and networking equipment. Free cash flow, an alternativenon-GAAP measure of liquidity, is defined as net cash provided by operating activities less capitalexpenditures. In the first quarter of 2012, free cash flow was $3.09 billion.We expect to continue to make significant capital expenditures. A reconciliation of free cash flow to net cash provided by operating activities, the GAAP measure of liquidity, is included at the end of this release.
Cash
– As of March 31, 2012, cash, cash equivalents, and short-term marketable securities were $49.3billion.
Headcount
– On a worldwide basis, Google employed 33,077 full-time employees as of March 31, 2012,up from 32,467 full-time employees as of December 31, 2011.
WEBCAST AND CONFERENCE CALL INFORMATION
A live audio webcast of Google’s first quarter 2012 earnings release call will be available athttp://investor.google.com/webcast.html.The call begins today at 1:30 PM (PT) / 4:30 PM (ET). Thispress release, the financial tables, as well as other supplemental information including the reconciliationsof certain non-GAAP measures to their nearest comparable GAAP measures, are also available on thatsite.
FORWARD-LOOKING STATEMENTS
Search History:
Result 00 of 00
00 results for result for
p.
Recommended
More From This User
Notes
Load more
