Google revenue and profit grow in Q1 2015 despite struggling Nexus

Google revenue and profit grow in Q1 2015 despite struggling Nexus
Google has released its financial results for the first quarter of 2015, and good news is that revenue and profits are growing, but not as fast as expectations set by Wall Street analysts.

Google raked in $17.3 billion revenue in the first quarter of 2015, a 17% increase year-on-year, and operating income stood at $4.45 billion, a 26% growth on the year. At the same time, expectations by the street pointed to $17.5 billion revenue. Shares rallied by more than 3% after market hours.

Google still makes the overwhelming majority of its money from ads, but the Google Play Store business is now also a significant part of the revenue stream. While the Play Store has grown in comparison to its state in the same period of last year (it’s a part of the “other” revenues at Google, up 23% y-o-y to $1.8 billion), Google noted that it actually recorded a 3% drop when compared against the fourth quarter of last year.

The reason seems to be in the declining sales of the Nexus brand. Google CFO Patrick Pichette admitted that the weakness in the Google Play Store comes mostly from recently introduced devices, and the biggest recent launches include the Nexus 6 and the Nexus 9. After the hugely discounted Nexus 5, Google introduced the Nexus 6 last year at a flagship-grade price and with a gigantic, 6-inch display, and those two factors could have been a turn-down for buyers. Similarly, the Nexus 9 comes with a $400 starting price, lower than the iPad, but much higher than the $250 full retail price Google asked for its previous tablet, the Nexus 7.

Interestingly, the results are also showing that Google is accelerating its new hires, as the company has grown by 9,000 employees in the past year.


source: Google

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14 Comments

1. Mxyzptlk unregistered

The Nexus not selling well? Oh my I wonder why. Could it be because Google and Motorola botched the launch of the Nexus 6? Could it be Google released a really expensive nexus with buggy software? Or is it because they axed the smaller Nexus 5 that still had a fanbase.

3. shahrooz

Posts: 792; Member since: Sep 17, 2013

don't be naive, Nexus is not something for Google to make profits. it has other purposes. Google has a different strategy than apple for making money.

12. Niva.

Posts: 440; Member since: Jan 05, 2015

That is just a short-sighted statement. While the Nexus line does have other more legitimate purposes besides turning a profit, ultimately Google is in this to make money. Ideally they would make a profit on Nexus phones, and they certainly can. Instead they've been making bonehead decisions over the years. The Nexus 6 is actually fine, but it should have just been one available option for those who want a big expensive phone. The fact they discontinued and didn't refresh the Nexus 5 (which was damn near perfect after they ironed out the bugs) is extremely disappointing. So long as manufacturers continue to release phones with ugly/buggy overlays and filled with apps that you cannot uninstall there will be a prupose for the Nexus line of phones. Perhaps you're right though, and just like Motorola wasn't interested in making money with their Droid Turbo, Google just doesn't care about money and the Nexus line will disappear.

13. QWIKSTRIKE

Posts: 1459; Member since: Mar 09, 2010

The Nexus is not selling well in the Google Play Store because of restricted inventory because the carriers wanted to sell the device once they saw how popular the N5 was. There is nothing in the article that says the N6 is not selling well. It only mentions that the 3% loss of sales in the GPlay store is due to less Nexus sales. I wonder if the launch of the N6 on carriers is why Google only made a limited supply of N6 available to the GPlay store. Remember they must make the s**t carriers like Verizon , and AT&T happy, and I bet they complained that selling them on the GPlay store would hurt their inventory sales effort.....good business practice to appease partners!

2. vincelongman

Posts: 5720; Member since: Feb 10, 2013

Not surprised that the Nexus 6 and 9 aren't selling I hope there's a $300-400 Nexus 5 successor this year And a Nexus 9 successor with no compromises that's actually worth the $400 Or a ~$250 Nexus 7 successor

4. lallolu

Posts: 732; Member since: Sep 18, 2012

Whoever expects a 6" phone to sell well needs his/her head examined.

5. DeusExCellula

Posts: 1390; Member since: Oct 05, 2014

Nexus 7> Nexus 9

6. refillable

Posts: 1071; Member since: Mar 10, 2014

Nexus 6 is a little blunder. They should move back to LG or Samsung to introduce an affordable smartphone again.

7. Oğuzhan_77

Posts: 112; Member since: Nov 18, 2013

nexus 2015 phone specs ?

8. Arthurhkt

Posts: 725; Member since: Apr 19, 2012

To be fair, Nexus 6 is a really great phone, the overall built quality is a beast. But the price well.... Not so attractive.

9. joey_sfb

Posts: 6794; Member since: Mar 29, 2012

Just get Asus, Huawei and XiaoMi to do a Nexus. They will be able to offer top spec at rock bottom prices.

10. thetreblemaker

Posts: 5; Member since: Apr 24, 2015

it's not sureprising the nexus 6 is still struggling since the nexus 6 are stray from nexus' tradition (flagship spec and performance yet very affordable). IMO nexus 5 still the best nexus that google ever sold.

11. JunitoNH

Posts: 1946; Member since: Feb 15, 2012

The elephant in the room is the price, the decided to price the Nexus same, or close to flagship devices, and people chose the latter. Six hundred forty-nine for a Nexus, yeah....ok.

14. Zanatech

Posts: 32; Member since: Apr 19, 2015

The Nexus not selling well??????

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