Google’s parent company, Alphabet has released the report for Its Q1 performance. The tech giant generated $41.16 billion in revenue exceeding analyst estimates of $40.33 billion. However, business slowed considerably in march due to the coronavirus pandemic.
Speaking with investors about the Q1 results, Chief Executive Officer of Alphabet and Google, Sundar Pichai explained that the strong revenue growth experienced in January and February was significantly undercut by the sudden slow advertising in March.
“It was the tale of two quarters, strong revenue growth in January and February was undercut by a “significant and sudden slowdown in advertising. When I last spoke with you, no one could have imagined how much the world would change – and how quickly.”Sundar Pichai, Chief Executive Officer of Alphabet and Google
Advertisment generated bulk of Alphabet’s revenue
The Q1 2020 report shows the first effects of the pandemic on the digital ad market as restrictions on business occasioned by the crisis have given advertisers little or no incentives to market their goods.
However, advertising from Google search, YouTube and Cloud still generated the bulk of Alphabet’s revenue. Google still generated its highest revenue from advertising, raising $33.7 billion. This was up 10.3% from the revenue recorded during the same time last year.
“Our business, led by Search, YouTube, and Cloud, drove Alphabet revenues to $41.2 billion, up 13% versus last year, or 15% on a constant currency basis.”Ruth Porat, Chief Financial Officer of Alphabet and Google.
Google cloud raised about $2.7 billion, while non-advertising revenue rose to $4.4 billion from $3.6 billion in the same time last year. Other Bets, consisting of Alphabets many other projects, generated less revenue than it did during the same quarter the previous year. The company reported just 135 million down from the $170 million generated at this time last year.
Over $6 billion in Profits
Alphabet earned $6.8bn during the quarter, a 2% increase from its profit last year. The company’s stock climbed 3% to $1,269.50 in after-hours trading after shedding 3.3% in regular trading.
However, its earnings per share at $9.87 came in below expectation as experts were anticipating a $10.38 per-share profit.
In summary, the results of Q1 2020 shows a slow business in March due to the pandemic. With no end in sight for the current crisis, the effect on advertising may further reduce the company’s earnings next quarter. Ruth Porat, Chief Financial Officer of Alphabet and Google has, however, said that the company is focusing on executing more efficiently while continuing to invest in long-term opportunities.
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