Google Announces First Quarter 2006 Results Thursday April 20, 4:01 pm ET
< Google Network Revenues -- Google's partner sites generated revenues, through AdSense programs, of $928 million, or 41% of total revenues. This is a 59% increase over network revenues of $584 million generated in the first quarter of 2005 and a 16% increase over fourth quarter 2005 revenues of $799 million. >
UMMmm?? UP 16% on their Q4-2005 figures. (And TAC represented an approx. 78% or 32% of advertising revenues!!)
Q1 Financial Summary
Google reported revenues of $2.25 billion for the quarter ended March 31, 2006, an increase of 79% compared to the first quarter of 2005 and an increase of 17% compared to the fourth quarter of 2005. Google reports its revenues, consistent with GAAP, on a gross basis without deducting traffic acquisition costs, or TAC. In the first quarter of 2006, TAC totaled $723 million, or 32% 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 reconciled to the corresponding GAAP measures in the section below titled "About non-GAAP financial measures."
GAAP operating income for the first quarter of 2006 was $743 million, or 33% of revenues. This compares to GAAP operating income of $570 million, or 30% of revenues, in the fourth quarter of 2005. Non-GAAP operating income in the first quarter was $887 million, or 39% of revenues. This compares to non-GAAP operating income of $718 million, or 37% of revenues, in the fourth quarter.
GAAP net income for the first quarter was $592 million as compared to $372 million in the fourth quarter. Non-GAAP net income was $697 million, compared to $469 million in the fourth quarter.
GAAP EPS for the first quarter was $1.95 on 304 million diluted shares outstanding, compared to $1.22 for the fourth quarter, on 304 million diluted shares outstanding. Non-GAAP EPS was $2.29, compared to $1.54 in the fourth quarter. Non-GAAP operating income, non-GAAP net income, and non-GAAP EPS in the first quarter of 2006 are computed net of certain material items: stock-based compensation (SBC) and estimated plaintiffs' attorneys' fees related to the proposed settlement of the Lane's Gift class action lawsuit. In the first quarter, the charge related to stock-based compensation was $115 million as compared to $58 million in the fourth quarter of 2005, which was also excluded from non-GAAP calculations. Plaintiffs' attorneys' fees related to the proposed Lane's Gift class-action lawsuit settlement are estimated to be $30 million. In the fourth quarter of 2005, the contribution to the Google Foundation of $90 million was excluded from the calculation of non-GAAP operating income, non-GAAP net income, and non-GAAP EPS. Tax benefits related to SBC charges, the estimated plaintiffs' attorneys' fees, and the contribution to the Google Foundation have been excluded from non-GAAP calculations. The tax benefit related to SBC was $27 million in the first quarter and $14 million in the fourth quarter. The tax benefit related to the estimated plaintiffs' attorneys' fees in the first quarter was $12 million. The tax benefit related to the contribution to the Google Foundation in the fourth quarter was $37 million. Reconciliations of non-GAAP measures to GAAP operating income, net income, and EPS are included at the end of this release.
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