Alphabet beats Q3 expectations

Losses in Alphabet's Other Bets category, which includes brands such as Nest and Fiber, continue to increase.

Google parent company Alphabet posted better-than-expected Q3 results Thursday after the bell.

As usual, there are a lot of numbers to look at in Alphabet's earnings report. The tech giant reported a net income of $5.06 billion, or $7.25 per share.

Non-GAAP earnings were $9.06 per share on a revenue of $22.45 billion, up 20 percent year-over-year, when including traffic acquisition costs (TAC).

Wall Street was looking for Q3 earnings of $8.64 per share with $22 billion in revenue.

Net revenue excluding TAC was expected to be at least $17.9 billion.

Alphabet delivered above target with $18.27 billion in revenue excluding TAC.

Google revenues, which include more of the enterprise cloud, software and data management products, attributed most of Q3 sales with $22.3 billion in revenue, up from $21.32 billion the previous quarter.

In the Other Bets category, which is made up primarily of Nest and Fiber, as well as Alphabet's healthcare-driven initiatives and other speculative projects or 'moonshots,' Alphabet posted revenue of $197 million over the quarter, with operating losses reaching $865 million. Last quarter, losses in this category totaled $859 million.

Alphabet CFO Ruth Porat noted on the conference call how the company tries to look at Other Bets over the long term, as most of the initiatives are early stages and that the revenue "provides only partial insight regarding our progress."

"We are building out these businesses systematically and thoughtfully," she said.

Porat also said Google Cloud is "generating substantial revenue growth reflecting the ongoing momentum in the business as well as the enormous opportunity in this area."

Google's cost-per-click, which is how much it makes off each advertising click, decreased 6 percent year-over-year., which is more than expected.

Looking ahead to the fourth quarter, Wall Street is expecting non-GAAP earnings of $9.68 per share with $24.8 billion in revenue.

Alphabet's shares were up nearly two percent in late trading.

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