Alphabet’s net income more than doubles to $18bn as Google advertising revenue booms
Google’s parent company Alphabet reported a net profit of $17.9 billion in the first quarter, up by more than 162 per cent from a year ago, on the back of strong revenue growth in its services arm.
Revenue in the three months through to March 31 rose by 34 per cent annually to $55.3bn, beating analysts’ estimate of $51.7bn.
The California-based company also approved a $50bn share buy-back that caused its shares to rise by 4.2 per cent to $2,388 in extended trading.
“People have turned to Google Search more than ever since the pandemic began. We see hundreds of millions of searches every day for Covid and related health information ... people are also searching for jobs,” said chief executive Sundar Pichai.
Google is working with top employment websites to help job seekers find roles that do not require a college degree, he said.
Alphabet’s advertising revenue from Google Search, YouTube and other activities grew by 32.3 per cent to $44.6bn in the first quarter, about $10.9bn more than in the same period last year.
This was the fastest annual growth in advertising revenue over the past four years.
Alphabet’s strong performance in the first quarter reflects “elevated consumer activity online and broad-based growth in advertiser revenue”, said Ruth Porat, chief financial officer of Alphabet.
Revenue from the cloud business grew by 45.7 per cent from a year ago to more than $4bn while revenue from its “Other Bets” segment rose by about 47 per cent annually to $198 million.
The segment includes subsidiaries involved in licensing and research and development services and the sale of internet offerings.
It includes Alphabet’s X lab, self-driving unit Waymo and other non-Google companies.
“We are very pleased with the ongoing momentum in Google Cloud, with revenue of $4bn in the quarter reflecting strength and opportunity in both GCP [Google Cloud Platform] and Workspace,” said Ms Porat.
Google will add more than 100 artificial intelligence-powered improvements in Maps this year such as Indoor Live View, which will help users navigate airports, transport stations and malls using augmented reality.
The company also plans to invest more than $7bn in offices and data centres, as well as create at least 10,000 new full-time jobs in the US this year.
“Even with a hybrid work environment, we will continue to need space, so we are continuing
to build out our campuses and office facilities,” said Ms Porat.
She expects property investment to “pick up the pace” by the end of this year as the company prepares its offices campuses for the hybrid work model.
Alphabet is also working towards operating on carbon-free energy around the clock by 2030 and helping one billion people make more sustainable choices by 2022.
“One example of how we are doing this is the new AI-powered feature in Maps that will show the route with the lowest carbon footprint ... you will also be able to compare the carbon impact between routes,” said Mr Pichai.
During the company’s earnings call, he said videos in YouTube’s Shorts player, a competitor to ByteDance’s TikTok, were receiving 6.5 billion daily views, up from 3.5 billion at the end of January.
We see hundreds of millions of searches every day for Covid and related health information
SUNDAR PICHAI Alphabet’s chief executive