Google parent Alphabet released its first-quarter earnings this afternoon and revenue rose 13% year-over-year to $41.2 billion. Net income rose 2.7% to $6.84 billion or $9.87 per share. Wall Street was expecting $10.35 a share. Google Search generated revenue of $24.5 billion for a gain of 11.6% while YouTube ad gross increased 33.5% to $4.04 billion. However, Google Chief Financial Officer Ruth Porat noted that YouTube's ad revenue growth started dropping off as the quarter came to an end.
Talking about Google in general Porat stated, "Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues." Later, the CFO said, "The decline in our Search and other ads revenue was abrupt in March, and although we’re seeing some early signs at this point that users are returning to more commercial behavior, it’s not clear how durable or monetizable that will be." While calling the current second quarter a "difficult one" for Google, she added that, "As we move beyond the crisis, and the global economy normalizes, this should be reflected in our advertising revenues. But it would be premature to comment on timing given all the variables here."
Pixel handsets, the Google Home smart speakers, and the Nest Hub smart displays, had revenue of $4.4 billion compared to $3.6 billion a year ago. That works out to a 22% annual increase. The amount of money Google had to pay to acquire traffic rose 9% to $7.45 billion. Advertising revenue, at $33.76 billion, saw a decline in growth from 2019's 16% to 10% for the first quarter.The "Other" segment, which includes the Google Play Store and hardware like the
Google CEO Sundar Pichai said during the company's conference call that Search results got a boost from COVID-19 as people looked up information about the virus. The executive said that at its peak, demand for information on coronavirus via Search was four times greater than peak search activity during the Super Bowl.
Alphabet's shares (GOOG-Nasdaq) soared after the release of the report. The stock, which had declined 3.31% or $42.21 to $1,233.67 in regular trading, rose $93.93 or 7.61% after hours to $1,327.60.