Alphabet (GOOG, GOOGL) reported first quarter earnings on Tuesday that beat expectations on the top- and bottom-lines, while also authorizing a massive $70 billion stock buyback. Alphabet stock rose as much as 5% in after hours trading on the news.
The Google and YouTube parent company reported revenues that beat expectations in its advertising segments, even amid an industry-wide digital ad slowdown. YouTube’s ad revenue came in at $6.69 billion, a small, but important, beat after several tough quarters.
Alphabet’s Google Cloud unit also turned a profit for the first time while revenue in this segment grew by 28%, the fastest of any of the company’s main business segments.
Here are the key numbers from Alphabet’s earnings, compared to analysts’ estimates compiled by Bloomberg:
Revenue: $69.7 billion actual versus $68.96 billion expected
EPS: $1.17 actual versus $1.08 expected
Google Ad Revenue: $54.55 billion actual versus $53.75 billion expected
YouTube Ad Revenue: $6.69 billion actual versus $6.64 billion expected
“We are pleased with our business performance in the first quarter, with Search performing well and momentum in Cloud,” said Alphabet and Google CEO Sundar Pichai in a statement.
“We introduced important product updates anchored in deep computer science and AI. Our North Star is providing the most helpful answers for our users, and we see huge opportunities ahead, continuing our long track record of innovation.”
The company also revealed a number of charges related to its efforts to rein in costs, including $2.6 billion in charges linked to the Alphabet’s layoffs and office space cutbacks.
Like much of the tech industry, Alphabet has been cutting costs aggressively this year and announced plans to cut 12,000 jobs in January.
Google has also been at the center of the industry’s AI competition that kicked off when ChatGPT’s rise mad this technology the tech world’s new growth catalyst. Over the last few months, Google’s AI capabilities have been questioned by some as the company’s AI chatbot, Bard, has failed to impress.
To reflect the company’s shifting strategy, a number of changes are being made to its AI strategy, including the merging of two AI teams, Google Research’s Brain unit and DeepMind.
This change was reflected in Tuesday’s results, which saw AI costs broken out of Alphabet’s Other Bets segment for the first time.
Losses related to the company’s AI efforts totaled $3.3 billion during the first quarter while its Other Bets segment lost $1.23 billion. Operating income for Alphabet totaled $17.4 billion during the quarter.
This is breaking news, more to come.