Alphabet, the parent company of Google and YouTube, posted robust first-quarter results Thursday, sending its shares up more than 5% in after-hours trading.
The tech giant outperformed Wall Street forecasts, reporting $90.23 billion in revenue, surpassing the $89.12 billion analysts expected, according to LSEG. Earnings per share came in at $2.81, significantly higher than the projected $2.01.
Advertising remained a key driver, generating $66.89 billion—an 8.5% increase from a year earlier. While YouTube ad revenue landed just shy of estimates at $8.93 billion, Google’s “Search and other” category rose nearly 10% year over year to $50.7 billion.
Alphabet highlighted the growing impact of artificial intelligence, with its AI Overviews tool now reaching 1.5 billion monthly users, up from one billion in October.
Despite slight misses in YouTube and cloud revenue targets, the company’s cloud segment reported $12.26 billion, marking a 28% year-on-year climb. Operating margins for the unit nearly doubled to 17.8%.
Net income surged 46% to $34.54 billion, or $2.81 per share. Adjusted for an $8 billion unrealized gain on private equity holdings, earnings were $2.27 per share, still ahead of expectations.
Alphabet also announced a $70 billion stock repurchase authorization, matching last year’s buyback plan.
Philipp Schindler, Google’s business head, flagged macroeconomic concerns, particularly former President Donald Trump’s upcoming termination of the de minimis trade exemption, set for May 2. Schindler said the policy change could create headwinds in 2025, especially from Asia-Pacific advertisers like Temu and Shein, who have historically leaned heavily on digital ad spending.
The company’s “Other Bets” unit, including self-driving arm Waymo and life sciences division Verily, posted $450 million in revenue, down from $495 million a year prior. Losses in the segment widened to $1.23 billion. Waymo, however, expanded its autonomous ride-hailing service to over 250,000 rides per week across several U.S. cities.
In March, Alphabet announced a landmark $32 billion acquisition of cybersecurity firm Wiz, its largest purchase ever. CEO Sundar Pichai said the deal is expected to reinforce Google Cloud’s multicloud security offerings and close next year, pending regulatory clearance.
CFO Anat Ashkenazi noted that Alphabet still plans to invest around $75 billion in capital expenditures this year, though timing of construction and equipment deliveries could affect quarterly allocations.
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