Alphabet beats estimates thanks to COVID-19 advertising boom
Google-owner Alphabet has reported results for the first quarter of 2021, beating estimates including revenues, which reached $55.31bn vs an expected $51.70.
Net profit, meanwhile, jumped to $17.9bn in the quarter. Revenue for its bread and butter search business was up 30% to $31.9bn, while its video sharing platform Youtube was up by almost 50%, reaching $6bn.
COVID-19 changes online patterns
Sundar Pichai, CEO of Google and Alphabet, said: “Over the last year, people have turned to Google Search and many online services to stay informed, connected and entertained. We’ve continued our focus on delivering trusted services to help people around the world. Our Cloud services are helping businesses, big and small, accelerate their digital transformations."
Advertising profits had a huge part to play in the results, with Google’s ad business accounting for 81% of revenue overall. In an earnings call, Chief Business Officer Philipp Schindler, said: “We're pleased with the strong growth in Google Services revenues in the first quarter. Year-on-year performance reflects elevated consumer online activity, broad-based strength in advertiser spend, and lapping of the initial impact of the pandemic on advertising revenues that began in March last year. [...] Over the last six months, people's shopping preferences have shifted constantly in response to changing conditions. It's not just online, it's not just offline, it's a mix. And that's our sweet spot with Search, Maps and YouTube.”
The trillion dollar club
The company somewhat recently joined the elite club of companies to have at some point been worth $1trn, alongside fellow tech giants Apple, Amazon and Microsoft (as well as Saudi Aramco and PetroChina).
Ruth Porat, CFO of Google and Alphabet, said: “Total revenues of $55.3 billion in the first quarter reflect elevated consumer activity online and broad based growth in advertiser revenue. We’re very pleased with the ongoing momentum in Google Cloud, with revenues of $4.0 billion in the quarter reflecting strength and opportunity in both GCP and Workspace.”