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Alphabet also announced a $70 billion share repurchase program, in continuation of last year's announcement in April.
Google parent Alphabet beat consensus expectations in the January-March 2023 period after missing them for four quarters in a row. The management also said that the outlook remains uncertain, leading to shares paring gains in after-hours trading.
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Overall revenue increased by 3 percent to $69.79 billion, higher than expectations of $68.9 billion. This marked the third-straight quarter of single-digit revenue growth for Alphabet after double-digit expansion for decades.
Earnings per share of $1.17 also topped estimates of $1.07.
A cut in online marketing budgets amidst recession fears, has wrecked havoc on companies like Google and Meta. YouTube advertising revenue for Alphabet stood at $6.69 billion - in-line with estimates but lower compared to the year-ago period. Overall ad revenue fell to $54.55 billion.
Also Read: Sundar Pichai got over $200 million as total compensation in 2022 more than 800 times the median employees pay
Along with spending cuts, YouTube also faces increased competition from TikTok.
In January this year, Google announced one of the biggest layoffs in its history by laying off 6 percent of its workforce or 12,000 employees. Multi-year cuts to real estate, employee services and equipment was also announced.
As a result, net profit fell to $15 billion during the quarter from $16.44 billion last year, as the company took a $2.6 billion charge pertaining to the layoffs and reduction in office space.
On the bright side, the cloud-computing business finally delivered a profit on an operating level. That stood at $191 million during the quarter, compared to an operating loss of $707 million last year.
Deals with Samsung and Apple are up for renewal this year and CEO Sundar Pichai said that the company will continue to remain competitive in such deals by constantly improving search, adding that the company holds 90 percent of the search market share.
Alphabet also announced a $70 billion share repurchase program, in continuation of last year's announcement in April. It will take into account the stock price of both Class A and Class C shares for the buyback.
Class A shares are those that come along with voting rights, while Class C shares have no such rights. Alphabet was the second higher repurchaser of its own stock in 2022, only next to Apple.
Shares of Alphabet rose as much as 4 percent in after-hours trading but pared gains to 1.5 percent.
(With Inputs From Agencies.)
First Published: Apr 26, 2023 5:10 AM IST
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