Google parent Alphabet on Thursday said its revenue rose 21 percent to $33.74 billion in the third quarter of 2018.
Google ad sales contributed 86 percent of revenue, but growth slowed to 20 percent from nearly 24 percent last quarter.
The company attributed much of the slower revenue growth to unfavorable currency exchange rates. Lower ad pricing to contend with antitrust concerns, new privacy rules in Europe and increased competition from Amazon.com may have played a role too, financial analysts said.
Non-advertising revenue, such as from sales of mobile apps and cloud computing services, also came in slightly below expectations.
The company’s operating margin to 25 percent from 28 percent a year ago.
Alphabet reported net profit of $9.2 billion, or $13.06 per share, compared with $6.7 billion, or $9.57 per share in the year-ago quarter.
Alphabet disclosed that passengers of its self-driving Waymo minivans are now paying for rides, but the offering remains limited to the Phoenix, Arizona region and Waymo’s finances are not broken out.
The Waymo operation in Phoenix is in the early stages of testing pricing, Alphabet Chief Financial Officer Ruth Porat said on a conference call on Thursday, noting that some employers were sponsoring workers’ rides.
Priming Alphabet’s newer ventures has been costly in terms of marketing and hiring, with about 5,300 employees added in the third quarter.
Alphabet’s cost of revenue was $14.3 billion in the third quarter, up 28 percent from a year ago. Capital expenditures soared to $5.3 billion from $3.5 billion last year, with 20 data center sites in development, Porat said.
Google has been fined $7.7 billion for antitrust violations in Europe over the last two years, and heightened attention on privacy, security, competition and the rise of artificial intelligence tools has led investors to fret about potentially costly regulatory scrutiny in the United States and elsewhere.
