New York CNN Business  — 

Alphabet’s startup investments appeared to be a headache for the company in its most recent quarter.

Google (GOOGL)’s parent company said Monday that its revenue for the three months ending in September topped $40 billion, an increase of 20% from the same period a year earlier. But the company’s earnings missed Wall Street’s expectations by a wide margin, in part because of its investments.

The company reported a roughly $1.5 billion hit from “unrealized losses on equity investments that we hold.” It did not spell out any particular investments, but Alphabet’s various venture arms have previously backed Lyft (LYFT), Uber (UBER) and Slack (WORK)— among other prominent tech companies — each of which has struggled on Wall Street since going public earlier this year.

Alphabet began including gains and losses on its equity investments with its earnings reports last year.

Apart from the dip in its investments, the company had a positive quarter. Growth at Google’s advertising business — still its chief moneymaker — has not been deterred by the intense regulatory scrutiny that has been leveled at it in recent months.

Ad revenues grew to nearly $34 billion in the three months, up 17% from the same period in the prior year. That comes even as the company faces an antitrust investigation by attorneys general from 48 states and billions of dollars in antitrust fines from the European Union related to its dominance in online advertising.

The company is also gradually seeing traction for revenue streams beyond its advertising business. Google’s other revenues — which include cloud services, Google Play and hardware — increased nearly 39% from the prior year. That expansion was driven primarily by cloud sales, which saw continued growth in every region globally, executives said on a call with analysts Monday evening.

Google CEO Sundar Pichai said that the company’s market opportunity in cloud computing has grown in the past two years as it obtains necessary certifications, which could help it compete with rivals Amazon and Microsoft for big government cloud contracts. (On Friday, the Pentagon awarded a $10 billion cloud computing contract to Microsoft.)

“We continue to invest thoughtfully in talent and infrastructure to support our growth, particularly in newer areas like Cloud and machine learning,” Ruth Porat, Alphabet’s CFO, said in a statement Monday.

The latest investment could be in hardware. Alphabet has reportedly offered to buy Fitbit, the fitness tracker maker, for an unknown sum.