Google parent Alphabet Inc reported a 20.2 per cent rise in quarterly revenue on Thursday, helped by robust sales of advertising on mobile devices and YouTube, and the search giant said it would repurchase about $7 billion of its Class C stock.
Alphabet, along with Facebook Inc, dominates the fast-growing mobile advertising market.
Shares of Alphabet, the world's number two company by market value, were up 1.6 per cent in after-hours trading.
Google's ad revenue rose 18.1 per cent to $19.82 billion in the third quarter, accounting for 89.1 per cent of Google's total revenue, compared with 89.8 per cent of revenue in the second quarter.
Paid clicks rose 33 per cent, compared with a rise of 29 per cent in the second quarter. Paid clicks are those ads on which an advertiser pays only if a user clicks on them.
Cost-per-click, or the average amount advertisers pay Google, fell 11 per cent in the latest period after dropping 7 per cent in the second quarter.
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Analysts on average had expected a decline of 7.9 per cent, according to FactSet StreetAccount.
Per-click costs have been falling as people shift to mobile devices from desktops. Because of the limited space, advertising on mobile devices is generally cheaper.
Research firm eMarketer has estimated that Google will capture $52.88 billion in search ad revenue in 2016 or 56.9 per cent of the global market.
Google's Other Revenue, which includes the company's increasingly important cloud business, jumped 38.8 per cent after rising 33 per cent in the second quarter.
The cloud business competes with services offered by market-leader Amazon.com Inc , Microsoft Corp and IBM Corp .
Alphabet's Other Bets generated revenue of $197 million but reported an operating loss of $865 million. In the year-earlier period, revenue was $141 million and the loss was $980 million.
Other Bets includes broadband business Google Fibre, home automation products Nest, self-driving cars as well as X, the company's research facility that works on "moon shot" ventures.
The company's consolidated revenue rose to $22.45 billion in the three months to September 30 from $18.68 billion a year earlier.
Net income rose to $5.06 billion, or $7.25 per Class A and B share and Class C capital stock, from $3.98 billion, or $5.73 per share, a year earlier.
Excluding one-time items, Alphabet earned $9.06 per share.
Up to Thursday's close of $817.35, Alphabet's shares had risen 5.1 per cent since the start of the year.