Google (Alphabet) Q1 2022 Earnings Report Recap

GOOGL missed on earnings and on revenue

Key Takeaways

  • Google Cloud revenue beat analysts' expectations.
  • Google Cloud is one of Alphabet's primary business segments. It provides developers with a cloud platform for building, testing, and deploying applications.
  • Alphabet's board of directors recently approved an additional $70.0 billion in stock repurchases.
Google (Alphabet) Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
EPS Miss $24.62 $25.65
Revenue Miss $68.0B $68.2B
Google Cloud Revenue Beat  $5.8B $5.7B

Source: Predictions based on analysts' consensus from Visible Alpha

Google (Alphabet) Financial Results: Analysis

Alphabet Inc. (GOOGLGOOG), parent company of Google, on April 26 reported Q1 FY 2022 earnings and revenue that missed consensus estimates. Earnings per share (EPS) fell 6.4% year over year (YOY), coming in below what analysts were forecasting. Google's revenue also missed analyst estimates, up 23.0% compared to the year-ago quarter. However, Google Cloud revenue beat analysts' expectations, coming in at $5.8 billion.

The company's shares fell more than 5% in extended trading. Over the past year, Alphabet's shares have provided a total return of 2.7%, about in line with the S&P 500's total return of 2.6%.

GOOGL Cloud Revenue

Google Cloud revenue grew 43.8% YOY, decelerating from the previous quarter's pace. It was the slowest pace of growth the company has recorded since the second quarter of FY 2020. Google highlighted the strong growth in Cloud revenue as well as Search revenue during the quarter.

Google Cloud is one of the tech giant's primary business segments, the other being Google Services. The cloud segment provides developers with a highly scalable and reliable platform for building, testing, and deploying applications. It also offers workspace collaboration tools, including apps like Gmail, Docs, Drive, Calendar, Meet, and more.

As of the end of the fourth quarter of 2021, Google Cloud had an estimated 9% of the global cloud market, ranking it third behind Microsoft Corporation's (MSFT) Azure and top-ranked Amazon.com, Inc.'s (AMZN) Amazon Web Services.

GOOGL Stock Repurchases

Last week, Alphabet's board of directors authorized the company to repurchase up to an additional $70.0 billion of its Class A and Class C shares.

GOOGL Earnings Call Recap

In the analyst call after results were announced, Chief Financial Officer (CFO) Ruth Porat said that YouTube saw “modest growth” mostly in direct response ads. The slower pace of growth mainly reflects tough comparisons to a strong first quarter of last year, she said. In addition, Chief Executive Officer (CEO) Sundar Pichai said that YouTube’s TikTok competitor, called Shorts, now is getting 30 billion daily views, which is four times as many as a year earlier.

Alphabet's next earnings report (for Q2 FY 2022) is expected to be released on July 25, 2022.

Article Sources

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  2. Alphabet Inc. "Alphabet Announces First Quarter 2022 Results," Page 1.

  3. TradingView. "Price Chart: GOOGL and S&P 500."

  4. Alphabet Inc. "Form 10-K for the Fiscal Year Ended December 31, 2021," Pages 6 & 7.

  5. Statista. "Cloud Infrastructure Services Vendor Market Share Worldwide From 4th Quarter 2017 to 4th Quarter 2021."

  6. Alphabet Inc. "Alphabet Announces First Quarter 2022 Results," Page 2.

  7. CNBC. "Alphabet reports weak earnings and revenue on big YouTube miss."

  8. Yahoo! Finance. "Earnings Calendar: GOOGL."

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