Alphabet Inc. (NASDAQ: GOOGL) beat revenue expectations for the third quarter of 2019 but earnings missed estimates. Shares fell 1.2% in aftermarket hours on Monday.

The company reported a 20% growth in total revenues to $40.5 billion compared to the prior-year quarter, beating forecasts of $40.3 billion. On a constant currency basis, revenues grew 22%.

Alphabet beats Q3 2019 revenue estimates but earnings miss expectations

GAAP net income was $7 billion, or $10.12 per share, compared to $9.1 billion, or $13.06 per share, last year. Analysts had predicted EPS of $12.38.

During the quarter, revenues from the Google segment increased 20% year-over-year to $40.3 billion. Advertising revenues grew 17% to $33.9 billion. Other revenues, which include revenues from cloud and Play Store, jumped 39% to $6.4 billion. Revenues from the Other Bets division, which includes Waymo and Verily, grew 6% to $155 million.  

Also read: Alphabet Q3 2019 Earnings Preview

Total traffic acquisition costs (TAC) to network members and distribution partners totaled $7.4 billion in the quarter. Total TAC, as a percentage of advertising revenues, was 22%. Paid clicks on Google properties rose 18% year-over-year while cost-per-click fell 2%.

The parent of Google reportedly made a bid to acquire smartwatch-maker Fitbit (NYSE: FIT) for an undisclosed amount, sending Fitbit’s shares soaring in today’s session. If this deal is successful, Alphabet would compete against Apple (NYSE: AAPL) in the wearables market, where the latter is already a leader. Neither Alphabet nor Fitbit have confirmed this report.

At the start of this year, Alphabet’s subsidiary Google had acquired smartwatch technology from Fossil Group (NASDAQ: FOSL) for $40 million. 

Listen to publicly listed companies’ earnings conference calls along with the edited closed caption text.