Alphabet reports Q1 earnings as it blows past Wall Street expectations
- Alphabet announced its Q1 earnings Tuesday, beating Wall Street expectations.
- Alphabet reported $45.6 billion in revenue, minus traffic acquisition costs, versus $42.48 billion expected by analysts.
- Google's ad revenue continued its post-pandemic recovery, while Cloud revenue also grew again in Q1.
Alphabet announced its first-quarter earnings Tuesday, blowing past Wall Street's expectations as the company's ad business continues to see strong growth following a pandemic slump last year.
Google's parent company brought in $45.6 billion in revenue for the quarter, minus traffic acquisition costs, versus $42.48 billion expected by analysts. Alphabet's revenue jumped 35.3% from $33.7 billion in the same quarter a year ago.
Google Cloud brought $4.02 billion in revenue and had an operating loss of $974 million in Q1, versus $3.99 billion in revenue expected by analysts. That's compared to $3.83 billion in revenue and $1.24 billion in operating losses during Q4 2020, the first time Google broke out its cloud business' performance separately.
Google's ad business also continued to rebound, following its first-ever revenue decline in Q2 2020, as advertisers reallocate their budgets back toward Google's platforms, especially YouTube, which brought in $6.01 billion in revenue during Q1 2021.
Following Alphabet's Q4 2020 earnings, analysts told Insider's Hugh Langley that YouTube's explosive 46% year-over-year Q4 growth signaled that the company has finally started tapping into lucrative TV ad spending.
Meanwhile, Alphabet's "other bets," which include Verily, Waymo, and other Alphabet businesses, reported revenue of $198 million against an operating loss of $1.15 billion, compared to analyst expectations of $1.21 billion in operating losses.
Alphabet also announced plans to buy back $50 billion of its Class C stock. The company's stock was up more than 4% in after-hours trading.
Here's what Alphabet reported, compared to what analysts expected, according to Bloomberg.
- Total revenue: $55.3 billion (Expected $51.61 billion)
- Revenue minus traffic acquisition costs (TAC): $45.6 billion (Expected $42.48 billion)
- Earnings per share: $26.29 per share, adjusted (Expected $15.65)
- Google Cloud revenue: $4.02 billion (Expected $3.99 billion)
- YouTube ads revenue: $6.01 billion
Google's earnings report comes as the digital advertising market has seen substantial growth over the past two quarters, though the company sent shockwaves through the industry by announcing last month that it will no longer track individual users online, which could upend how adtech companies do business.
But some experts previously told Insider's Isobel Asher Hamilton that the move may be a clever ploy by Google to further entrench its dominance of the digital ads market - a dominance that has invited increasing antitrust scrutiny, including three separate federal lawsuits, that could mean regulatory headwinds for Google down the road.