Google Profit Rises 63%

Google reported revenues of $3.66 billion for the quarter ended March 31, 2007, an increase of 63% compared to the first quarter of 2006 and an increase of 14% compared to the fourth quarter of 2006. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC. In the first quarter of 2007, TAC totaled $1.13 billion, or 31% of advertising revenues.

Google reports operating income, net income, and earnings per share (EPS) on a GAAP and non-GAAP basis. The non-GAAP measures are described below and are reconciled to the corresponding GAAP measures in the accompanying financial tables.

GAAP operating income for the first quarter of 2007 was $1.22 billion, or 33% of revenues. This compares to GAAP operating income of $1.06 billion, or 33% of revenues, in the fourth quarter of 2006. Non-GAAP operating income in the first quarter of 2007 was $1.41 billion, or 38% of revenues. This compares to non-GAAP operating income of $1.20 billion, or 37% of revenues, in the fourth quarter of 2006.

GAAP net income for the first quarter of 2007 was $1.0 billion as compared to $1.03 billion in the fourth quarter of 2006. Non-GAAP net income in the first quarter of 2007 was $1.16 billion, compared to $997 million in the fourth quarter of 2006.

GAAP EPS for the first quarter of 2007 was $3.18 on 315 million diluted shares outstanding, compared to $3.29 for the fourth quarter of 2006 on 313 million diluted shares outstanding. Non-GAAP EPS in the first quarter of 2007 was $3.68, compared to $3.18 in the fourth quarter of 2006.

Non-GAAP operating income, non-GAAP net income, and non-GAAP EPS are computed net of stock-based compensation (SBC). In addition, in the fourth quarter of 2006, we excluded from the calculation of non-GAAP net income and EPS tax benefits of $90 million related to the advanced pricing agreement we entered into with the IRS in December 2006 and $43 million related to the 2006 R&D tax credit. In the first quarter of 2007, the charge related to SBC was $184 million as compared to $134 million in the fourth quarter of 2006. Tax effects related to SBC have also been excluded from these non-GAAP measures. The tax benefit related to SBC was $27 million in the first quarter of 2007 and $35 million in the fourth quarter of 2006. Reconciliations of non-GAAP measures to GAAP operating income, net income, and EPS are included at the end of this release.

Full Financial Release avalable here.

Source: Google.