Alphabet Q1 results: Google parent’s revenue, net income beat estimates; stock up 12% | 5 key points

Alphabet, the parent entity of tech behemoth Google, reported strong earnings in the first quarter (January-March period) of calendar year 2024. The revenue and net income surpassed analysts’ estimates, leading to a sharp spike in the company’s shares in the extended trading session.

The Silicon Valley-based firm reported a quarterly revenue, excluding partner payouts, of $67.6 billion in the quarter ended March 31, 2024. This is higher than the average estimate of $66.1 billion shared by analysts tracked by news agency Bloomberg.

The use of artificial intelligence to enhance its cloud service offerings has also boosted the quarterly revenues, the company said in a post-earnings press conference. The surge in ad revenues, through YouTube and Google’s search engine platform, also drove the the overall jump in earnings.

Also Read: Meta stock falls 15% despite Q1 results beating estimates; here’s why

Alphabet Q1 results: Five key points

• The net income for the quarter came in at $1.89 per share, Alphabet said. This is way higher than Wall Street’s projection of $1.53 a share.

• The Big Tech firm declared its first-ever quarterly dividend payout. The company said it will pay 20 cents per share to eligible shareholders, and will also buy back additional stock worth $70 billion.

• According to analysts, a significant portion of the company’s success is attributable to its early investments in artificial intelligence. This has made its cloud computing services more lucrative, they pointed out. Google Cloud, the company’s arm that offers cloud computing, logged a 28% year-on-year increase in revenue to $9.57 billion.

• Revenue for search advertising, primarily related to the ads issued on Google search engine and video-sharing platform YouTube, increased by 14% year-on-year to $46.2 billion.

• The shares of Alphabet soared to as high as 12% in the extended trading session on NASDAQ, pushing the company’s market cap beyond the $2 trillion-mark. However, some of the gains were pared and the stock settled at $158, higher by 11.4% as against the previous close.

The results came a day after Meta Platforms, the parent entity of social media giants Facebook and Instagram, disappointed the market with its higher expenditure forecast for 2024. Although Meta surpassed analysts’ estimate with its Q1 results, the stock plunged by 15% on the higher expense projection. The market value was eroded by $200 billion.