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Sundar Pichai, chief executive officer of Alphabet Inc., speaks during the virtual Google I/O Developers Conference in New York, US, on Wednesday, May 11, 2022. The conference aims to help developers get the most out of Google’s tools and platforms while keynotes focus on hardware and software announcements for products due for release in the next 12 months. Photographer: Michael Nagle/Bloomberg via Getty Images
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Alphabet shares rose more than 4% in extended trading on Tuesday after Google’s parent reported first-quarter revenue that exceeded analysts’ estimates.
The company also said its board authorized a $70 billion share buyback.
Here are the key numbers:
- Earnings: $1.17 per share adjusted.
- Revenue: $69.79 billion vs. $68.9 billion, according to Refinitiv.
It’s not immediately clear if the reported earnings are comparable to the Refinitiv analyst estimate of $1.07 per share.
- YouTube advertising revenue: $6.69 billion vs. $6.6 billion, according to StreetAccount.
- Google Cloud revenue: $7.45 billion vs. $7.49 billion, according to StreetAccount.
- Traffic acquisition costs (TAC): $11.72 billion vs. $11.78 billion, according to StreetAccount.
Alphabet’s revenue rose 3% from $68 billion a year earlier, according to the earnings report. The company is mired in a multi-quarter stretch of low single-digit revenue growth after almost two decades of consistent and rapid expansion. With fears of a recession building since last year, advertisers have been reeling in online marketing budgets, wreaking havoc on Google, Facebook and others.
Ad revenue beat analyst expectations, but fell from the year prior to $54.55 billion. YouTube ad revenue stayed in line with analyst expectations, also declining from a year ago. Google’s Search and Other revenue came in at $40.36 billion, up slightly from $39.62 billion a year ago.
To grapple with the recent weakness, the company has had to make its most extreme cuts in its company history, including laying off 12,000 employees — about 6% of its workforce in January. This month, CFO Ruth Porat announced “multi-year” cuts to things like real estate, employee services and equipment.
The company said net income dropped to $15.05 billion from $16.44 billion a year earlier.
Google is finally generating profit in its cloud-computing business, which competes with Amazon and Microsoft. The unit recorded operating income of $191 million in the quarter, following a $706 million loss a year ago.
In addition to the overall pullback in ad spending, YouTube is also facing heightened competition from TikTok in short-form videos. YouTube shorts now has 50 billion daily views, CEO Sundar Pichai said in a call with investors Thursday.
Revenue in Other Bets, which includes Google’s life sciences unit Verily and self-driving car company Waymo came in at $288 million, a steep decline from $440 million a year ago.
WATCH: Mega-cap tech earnings can be a catalyst for the market
