Google’s Parent Company Alphabet Missed Expectations
Google’s parent company Alphabet reported weaker-than-expected earnings and revenue for the first quarter on Tuesday. The stock dropped about 3% in extended trading.
Google’s revenue came in at $68.01 billion in the first quarter, a growth of 23% from the same period last year. That’s a slowdown from 34% growth in the first quarter of the last year when the economy was reopening from the pandemic.
The tech giant reported $54.66 billion in advertising revenue for the quarter – up from $44.68 billion the year prior.
Alphabet and its results
YouTube ad revenue for the first quarter of the year failed to meet expectations. The video site was a particular beneficiary of the Covid-19 pandemic when people were primarily at home on their devices. Moreover, this miss comes as TikTok captures a growing share of the social media video content.
Alphabet’s CFO Ruth Porat said on the analyst call that YouTube experienced “modest growth” mostly in direct response ads.
Sundar Pichai serves as the CEO of Alphabet since 2015 when Alphabet Inc. was founded. The company’s CEO said on the call that YouTube’s TikTok competitor called Shorts now has 30 billion daily views. TikTok’s competitor gained popularity in a short period of time. In the previous quarter, it had 15 billion daily views.
Google’s cloud business was a standout in the first quarter, growing 44% and surpassing estimates as more big enterprises shift their workloads away from their own data centers. Nevertheless, Google’s cloud division is still losing money, reporting an operating loss of $931 million.
During the first quarter of the year, Google stopped much of its Russian operations due to the invasion of Ukraine. Revenue growth in the European region, which also includes the Middle East as well as Africa, slowed to 19% in the quarter from 33% a year earlier.
The tech giant’s other revenue segment, which includes hardware, Play Store, and non-advertising YouTube revenue reached $6.81 billion, fractionally higher than in the first quarter of 2021.
