Alphabet (GOOG, GOOGL) announced on Tuesday that it has authorized a large $70 billion stock buyback and had profitability for the first quarter that exceeded expectations on both the top and bottom lines. Following the announcement, shares of Alphabet climbed as much as 5% in after-market trade.
Despite an overall slump in the digital advertising market, Google and YouTube’s parent firm reported earnings that were above estimates in its advertising categories. After several rough quarters, YouTube’s ad revenue of $6.69 billion is a small but significant win.
While sales in Alphabet’s Google Cloud division climbed by 28%, it was the fastest-growing of the company’s primary business units.
Here are the highlights of Alphabet’s earnings report, as compared to Bloomberg’s compilation of analyst projections:
- 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
Alphabet and Google CEO Sundar Pichai stated in a statement, “We are pleased with our business performance in the first quarter, with Search performing well and momentum in Cloud.”
We made substantial enhancements to the product that are based on cutting-edge AI and computer science. Our primary goal is to offer the most useful information to our customers, and we anticipate tremendous growth as we continue our history of innovation.
Alphabet’s layoffs and reductions in office space accounted for $2.6 billion of the charges the business disclosed in relation to its efforts to reduce costs.
In January, Alphabet stated that it would be laying off 12,000 employees as part of a wider tech industry trend toward cost-cutting.
Since the advent of ChatGPT, when artificial intelligence became the industry’s new growth accelerator, Google has been at the forefront of this competition. Some have questioned Google’s AI powers recently because the company’s AI chatbot, Bard, has been underwhelming.
The company’s AI strategy is undergoing significant changes, including the merger of two AI teams, Google Research’s Brain unit and DeepMind, to better reflect the company’s new direction.
On Tuesday’s earnings report, artificial intelligence expenses were presented separately for the first time from Alphabet’s Other Bets section, reflecting this shift.
During the first quarter of 2018, the corporation lost $3.3 billion on its artificial intelligence projects and $1.23 billion on its Other Bets. Alphabet’s quarterly operating income was $17.4 billion.