- Alphabet generated a revenue of $41.2 billion, a net profit of $6.8 billion, and earnings per share of $9.87 in the first quarter of 2020.
- There was a slowdown in ad revenues by the end of the first quarter, and the company expects more in the second quarter.
- Google cloud and YouTube revenue were up by 52% and 33%, respectively, while other Bets were down by 21% as compared to financial reports for Q1 2019.
Alphabet (Google parent company) on Tuesday reported the company’s earnings during Q1 2020. The company generated a revenue of $41.2 billion and net profit of $6.8 billion while earnings per share reached $9.87 while these stats for Q1 2019 were $36.3 billion revenue, $8.3 billion net profit, and $11.90 earnings per share. Google advertising generated a total amount of $33.8 billion in the form of income, which counts for 82% of the Alphabet’s total revenue for Q1 2020.
Analysts expected Alphabet’s revenue and earnings per share to be $40.3 billion and $10.38 in the first quarter of 2020, and it seems that the company was able to beat the revenue projected but could not meet that of earnings per share. Alphabet’s stock was down by 3% and up by 7% in regular trading and during after-hours trading, respectively.
Sundar Pichai, Alphabet, and Google CEO stated in a statement that it is a huge privilege to be able to help during these challenging times .While the masses are relying on Google’s services more than ever, the company has marshaled its product development and resources during these times.
Alphabet’s revenue for Q1 2020 increased by 13% as compared to last year, but Ruth Porat, CFO at Alphabet, warned that this quarter ended on a low note and added that the company expects Q2 2020 would be a difficult one for its ad revenues. Yet, Porat noted that it will be premature to comment on timings considering all the variables. She said that the company’s performance was excellent during Jan and Feb, but the company experienced a significant slowdown in ad revenues during March. Traffic acquisition costs also increased by 8.6% by reaching $7.45 billion.
Alphabet is slowing down it’s hiring as the headcount rose by 19% to 123,048 employees during the first quarter of 2020.
YouTube’s ads revenue was $4.04 billion for Q1 2020, which is 33% more as compared to $3.03 billion in revenue in the first quarter of 2019. This figure excludes non-advertising income for YouTube, and that revenue is added in the ‘Google other’ line item. The ‘Google other’ was $4.4 billion in Q1 2020 hardware sales are also included in this line item.
"On YouTube, we are quickly removing content that violates policy, and raising authoritative content from news organizations and experts. Up to last week, our COVID-19 info panels have had 20 billion impressions.", announced Pichai in a press release. Adding further, "YouTube subscriptions continue to grow. The team has launched YouTube Kids in 15 new countries around the world since the beginning of the year, and rolled out new features to make kids-focused channels safer."Google’s cloud division includes the revenue generated from Google Cloud and G Suite, making the comparison difficult with other cloud providers like AWS and Microsoft Azure. Google Cloud generated $2.78 billion revenue in first quarter of 2020 which is up by 52% as compared to revenue generated in Q1 2019 which was $1.83 billion. Google Cloud revenue increased by 53% as compared to earnings in Q4 2019, and this is the only other data point available as the company just began breaking out Google Cloud’s revenue in the last quarter.
The ‘other bets’ revenue decreased by 21% to $135 million, while losses increased by 29% to $1.1 billion during Q1 2020. The ‘other bets’ include other companies under the Google parent company Alphabet’s umbrella and displays how much Alphabet is investing in its research projects.
Photo: JOHANNES EISELE/AFP/Getty Images
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