Google Q1 Earnings Review

Alphabet reported results on April 25^th after the market closed. The company has been in quite a controversial position over the past two years. In this article, I’ll walk you through their earnings reports and management’s commentary. At the end, I’ll post my take on the quarter and what I am doing portfolio-wise.

Google had revenues of 80.5bn during the first quarter of 2024, growing 15.4% on a yearly basis. Revenue growth had consistently decelerated after peaking in mid-2021, but started accelerating after the end of 2022. This is attributable to all of the business units, into which I’ll dive after the general overview.

It had been curious to observe Alphabet’s profit margin dropping to 20% during 2022. During this last quarter, Google generated 46.82bn in gross profit, implying a margin of 58.1%, which expanded 200bps YoY. Operating income was reported at 25.47bn, with a margin of 31.6%, up from 25% last year. Lastly, the company reported a record 23.66bn dollars in net income, with a net profit margin of 29.4%.

Alphabet brought in 28.84bn in cash from operating activities, representing a yearly increase of 22.7%. The increment is mostly explained by operating income. On the other hand, capital expenditure were a record 12 billion. It is important to note that management had guided for continued step ups in CapEx.