Google parent Alphabet reported third-quarter profit that was both above and below the line, with strong revenue growth from the company’s cloud division.

The company’s shares rose as much as 6% in after-hours trading.

Here are the results:

• Earnings per share: $2.12 versus $1.85 expected by LSEG
• Gain: $88.27 billion vs $86.30 billion expected by LSEG

Here are other numbers Wall Street looked at:

• Ad revenue on YouTube: $8.92 billion versus $8.89 billion, according to StreetAccount
• Google Cloud revenue: $11.35 billion vs According to StreetAccount, $10.88 billion
• Traffic Acquisition Cost (TAC): $13.72 billion versus $13.53 billion, according to StreetAccount

Alphabet’s revenue grew 15% year over year, which is stronger than the same quarter last year.

The company reported massive cloud revenue of $11.35 billion, up nearly 35% from $8.41 billion a year ago. The company attributed its strong cloud results to their artificial intelligence offerings, including subscriptions for enterprise customers.

Alphabet CEO Sundar Pichai opened his call with investors, saying the company’s “full stack” of AI products are now operating at scale and used by Google’s billions of users, “creating a virtuous circle.”

The search company’s strong quarter heralds a big earnings week for the tech sector’s mega-cap companies. Meta And Microsoft Wednesday report, followed by Apple And Amazon on Thursday.

Alphabet’s net income rose to $26.3 billion, or $2.12 per share, from $19.7 billion, or $1.55 per share, in the year-earlier quarter.

Google’s search business generated $49.4 billion in revenue. That was up 12.3% from a year ago, and search remains the largest contributor to revenue growth for the company, Alphabet CFO Anat Ashkenazi said on the call.

Turning to AI for more cost savings

Alphabet plans to build on existing cost-saving efforts around using AI to streamline workflow and manage the company’s workforce and physical footprint, Ashkenazi said.

“I plan to build on these efforts, but also evaluate where we could accelerate work and where we may need to pivot to free up capital for more attractive opportunities,” said Ashkenazi, who joined the company in June after 23 years at the pharmaceutical manufacturer. Eli Lilly.

Alphabet reported advertising revenue of $65.85 billion. That was up from $59.65 billion a year ago, showing that Google’s advertising business continues to grow, albeit at a slower pace than in the second quarter.

YouTube ad revenue just exceeded analyst expectations and showed better growth than last quarter. The Google-owned company is facing increasing pressure from other advertisers such as Netflix, TikTok and Amazon.

AI improves YouTube’s recommendations, Chief Business Officer Philipp Schindler said on a call with investors. The company’s AI language model, Gemini, has given YouTube the ability to “recommend more relevant, fresher and personalized content to the viewer.”

Google Workspace, the company’s collection of cloud computing and productivity suites, saw strong growth during the third quarter, Ashkenazi said. Google Cloud Platform, the company’s data management and AI suite, saw growth that exceeded the cloud unit’s growth during the quarter, Ashkenazi added.

Other Bets, which also includes life sciences unit Verily and self-driving car unit Waymo, reported revenue of $388 million in the third quarter. That’s up from $297 million a year ago.

Last week, Waymo closed a $5.6 billion funding round to expand its robotaxi service in Los Angeles, San Francisco and Phoenix and to more cities.

Google Lens, the company’s image recognition product that uses mobile cameras and photos, is now used for more than 20 billion visual searches per month, Pichai said. It is one of the fastest growing search products and is often used for shopping, he added.

Alphabet’s third quarter was filled with upheavals both externally and internally, including at the highest levels and in Alphabet’s most important activities.

Earlier this month, the company replaced Prabhakar Raghavan, the company’s search and advertising boss since 2018, with Nick Fox, a longtime executive known for his role in Google’s Assistant unit. In addition, the team working on the Gemini app, which includes the company’s direct-to-consumer products in artificial intelligence, will join Google DeepMind led by Demis Hassabis.

The company announced Tuesday that it is evaluating how this reorganization will impact its segment’s operating results.