Google’s parent company, Alphabet, said on Tuesday that revenue in its most recent quarter increased sharply from the same period a year ago, boosted by strong demand for online advertising on its search results and YouTube videos and by continued growth at its cloud computing arm.
Alphabet posted revenue of $55.31 billion, up 34 percent from a year earlier, and net profit more than doubled to $17.93 billion in the first quarter. It was the third straight quarter of record profit for the company. The results came in above analysts’ expectations. Shares of Alphabet rose more than 4 percent in after-hours trading.
Like the other technology conglomerates, Alphabet has thrived during the pandemic. After a pullback in travel-related advertising during the first few months of the pandemic, Google’s advertising business has rebounded with gusto. Businesses are spending money with Google to target consumers who are spending more time online.
Advertising revenue rose 32 percent in the quarter spurred by strong demand for search marketing. Alphabet also generated $6 billion in YouTube ads, an increase of 49 percent.
The results demonstrated once again the enduring strength of Google’s online properties, which remain unfazed — at least financially — by regulatory pressure and a flurry of antitrust lawsuits.
In a conference call with analysts, Ruth Porat, Alphabet’s chief financial officer, said the company benefited during the quarter from “elevated online activity” but warned that the trend may not continue once lockdown restrictions are lifted and economies recover.
Google’s cloud computing business has continued to scoop up customers during the pandemic as companies have moved more of their data and work into centralized data centers in an effort to save money and become more digitally nimble. Revenue at the cloud business grew 46 percent, while its losses narrowed to $974 million in the first quarter. But Google continues to be a distant third to Amazon and Microsoft in the cloud business.
Alphabet’s results were also helped by belt-tightening during the pandemic. The company’s sales and marketing costs remained flat even though revenue grew by $14 billion, and it reduced general spending from a year earlier. The lower costs also took place while Google was continuing to hire new staff. Alphabet increased its head count by nearly 17,000 people to roughly 140,000 employees globally.