Pichai is very happy: Google's net profit increased by 162% during the same period, cloud business losses were halved, and its stock price rose by more than 4%

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Just now, Google's parent company Alphabet released its first quarter financial report for fiscal year 2021.

Although the growth of cloud business was lower than analysts expected, Google's overall revenue still exceeded expectations thanks to the continued growth of advertising and other businesses .

Among them, the total revenue was US$553.14, and the advertising revenue alone reached US$44.684 billion, an increase of more than 32% year-on-year .

Operating profit was US$16.437 billion, up 106.05% from US$7.977 billion in the same period last year .

Net profit was $17.93 billion, up 162% from $6.836 billion in the same period last year .

Coupled with the recent $50 billion stock repurchase plan, Google's after-hours stock price once broke through the $2,400 mark, closing at $2,417.81 per share, up more than 4% , setting a new stock price record in recent years.

Total revenue exceeded expectations by $4 billion

Overall, Alphabet's total revenue in the first quarter was $55.314 billion, up 34% from $41.159 billion in the same period last year, exceeding market expectations by nearly $ 4 billion .

On average, Q1 diluted earnings per share reached $26.20 , far exceeding analysts' expectations of $15.82 and up 166% from $9.87 in the same period last year.

According to the financial report, advertising revenue in the first quarter was US$44.684 billion, a year-on-year increase of nearly 32% compared to US$33.763 billion last year .

Of course, this is also related to the impact of the epidemic in 2020.

Among them, revenue from Google search and other services was US$31.879 billion, a year-on-year increase of 30%.

YouTube advertising revenue was $6.01 billion, a year-on-year increase of 49%. According to CNBC, YouTube's platform usage rate has increased from 73% in 2019 to 81% in 2021.

CEO Pichai said that Google's search and online services businesses have both grown thanks to the increased frequency of people working from home.

Traffic acquisition costs reached US$9.71 billion, higher than market expectations of US$9.25 billion.

In addition, Alphabet said it has earned $4.84 billion on some of its investment projects.

Google Cloud business growth falls short of expectations

In addition, Google's cloud business, which is regarded as Google's "next growth engine", remains highly anticipated.

Google Cloud business includes infrastructure, data analysis platform and collaboration tools (such as Google Docs, Sheets, etc.) , as well as some other businesses targeting enterprise customers.

This quarter, Google Cloud service revenue increased by 46% year-on -year, breaking the $4 billion mark to reach $4.05 billion, but it was still lower than analysts' forecast of $4.07 billion.

Although the cloud business still lost $974 million in this quarter, it was significantly lower than the loss of $1.73 billion in the same period last year.

After all, in the full year of 2020, Google Cloud's operating losses totaled US$5.607 billion, an increase from US$4.645 billion in 2019 and US$4.348 billion in 2018.

According to Bank of America analyst Justin Post, the performance of the cloud business will become more important to Google's revenue in 2021 as advertising comes under regulatory scrutiny.

Chief Operating Officer Ruth Porat also said in the interview that the focus will still be on the cloud business:

As the scale increases, the operating loss and operating profit of the cloud business will improve. At present, we will continue to invest in the development of the cloud business for the purpose of long-term performance.

Waymo and other innovative businesses are still losing money

In addition to its core businesses such as advertising and cloud services, Google also announced revenue from a series of innovative businesses.

These businesses include Waymo autonomous driving , DeepMind artificial intelligence, Verily smart healthcare , Google Fiber fiber communications , and venture capital funds Google Capital and Google Venture .

This part of the business contributed only a small part of Google's revenue, about $198 million, higher than the expected $162 million and up 47% from the same period last year.

But at the same time, the operating loss was US$1.145 billion , which also widened from the loss of US$1.121 billion in the same period last year.

In fact, in early April this year, Waymo CEO John Krafcik officially announced his resignation .

According to the Financial Times, the reason may be that his performance at Waymo did not satisfy Google management.

However, Pichai said in the interview that he would continue to invest in Waymo:

John Krafcik has been planning to resign for a long time. Last quarter, Waymo began limited testing in San Francisco, and we will focus on ensuring that we can make tangible technological progress.

Google 2021 Q1 financial report:
https://abc.xyz/investor/static/pdf/2021Q1_alphabet_earnings_release.pdf?cache=0cd3d78

Reference links:
[1]https://www.cnbc.com/2021/04/27/alphabet-goog-earnings-q1-2021.html
[2]https://www.ft.com/content/dc6e4693-ef3f-4bce-90e5-1bcdeb67c63d
[3]https://www.youtube.com/watch?v=B4VgDDlOaEc