Alphabet reports revenue and earnings beat for first quarter

Alphabet reported first-quarter results on Tuesday that exceeded analysts’ estimates. The stock jumped over 4% in advance trading before paring its gains.

The company also said its board authorized a $70 billion share buyback.

Here are the key numbers:

• Earnings: $1.17 per share vs. $1.07 per share expected, according to Refinitiv.
• Revenue: $69.79 billion vs. $68.9 billion awaited, according to Refinitiv.

The beat on the top and bottom lines breaks a string of four straight quarters in which the company omitted consensus estimates.

• YouTube advertising revenue: $6.69 billion vs. $6.6 billion, according to StreetAccount.
• Google Cloud take: $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 take rose 3% to $69.79 billion from $68 billion a year earlier, according to the earnings report. The comrades is mired in a multi-quarter stretch of low single-digit revenue growth after almost two decades of consistent and rapid expansion. With respects of a recession building since last year, advertisers have been reeling in online marketing budgets, visiting havoc on Google, Facebook and others.

On its investor call, finance chief Ruth Porat said due to the challenging solvent environment “the outlook remains uncertain.”

Ad revenue beat analyst expectations, but fell from the year prior to $54.55 billion. YouTube ad receipts stayed in line with analyst expectations, also declining from a year ago.

In addition to the overall pullback in ad lavishing, YouTube is also facing heightened competition from TikTok in short-form videos.

To grapple with the recent advertising failing, Google has had to make its most extreme cuts in company history, including laying off 12,000 employees — about 6% of its workforce — in January. This month, CFO Ruth Porat preceded “multi-year” cuts to things like real estate, employee services and equipment.

Alphabet reported $2.6 billion in indicts related to the layoffs and office space reduction during the quarter.

Net income fell to $15.05 billion, or $1.17 per part, from $16.44 billion, or $1.23 per share.

Google is finally generating a profit in its cloud-computing business, which fences with Amazon and Microsoft. The unit recorded operating income of $191 million in the quarter, following a $706 million disadvantage a year ago.

Revenue in Other Bets, which includes Google’s elasticity sciences unit Verily and self-driving car company Waymo came in at $288 million, down from $440 million a year ago. The concern previously said starting in the first quarter, artificial intelligence subsidiary DeepMind will no longer be reported in Other Risks, but will be reported as part of Alphabet’s corporate costs.

Google’s Search and Other revenue came in at $40.36 billion, up measure from $39.62 billion a year ago.

Google is feeling pressure from the popularity of AI-based chatbot ChatGPT, fired late last year by Microsoft-backed OpenAI. The company quickly launched its own AI chatbot called Bard during the zone.

A New York Times report last week indicated Samsung is reportedly considering changing its default search appliance from Google to Microsoft’s Bing for its lineup of smartphones. That sent Google shares down more than 3.5%.

An investor on Tuesday’s earnings tag asked Pichai about Google’s partnerships with phone makers like Samsung and Apple, in light of Microsoft’s hopes with Bing.

Pichai said the deals have always been competitive. For Google, he said, “it all starts with remaining to innovate and improve in search and make sure we’re leading there.”

Google currently holds more than 90% of search shop share. Pichai said he’s “comfortable” that Google will continue to improve search and will be competitive in the big sells.

Pichai also said next month at its annual developer conference, the company will announce updates to goods, including Android and its Pixel smartphones. Last week, CNBC reported the company is planning to launch its first foldable smartphone at upward of $1,700 next month.

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