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Alphabet Q1 2018 Earnings [pdf]
- sounds 8y agoDouble EPS (non-GAAP) from $7.73 to $13.33... On the downside, effective tax rate is down to 11%. That's concerning because the EU is very unhappy about the whole "double Irish with a Dutch sandwich."
- lawrenceyan 8y agodouble EPS. I love how normal this has become that people aren't even that shocked anymore when numbers like these get released. republican taxes lmao
- hbosch 8y agoEPS was inflated due to new accounting practices. Actual is around $9.93 or therabouts – I believe it was inflated due to $GOOG finally disclosing their myriad investments, with the leader being Uber.
- raesene9 8y agoMost of the change is due to a one time change in accounting policy, operating income was up but "only" by $500m, whereas the impact of the change in accounting was over $3b
- fjsolwmv 8y agoWhat does EU care about how much Google pays in US tax?
- kgwgk 8y agoThat’s the global tax.
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- 7373737373 8y agoEarnings call: https://www.youtube.com/watch?v=KR6JCmoEIUw https://www.youtube.com/watch?v=KR6JCmoEIUw
- chollida1 8y agoMy notes.... Numbers: - Alphabet 1Q EPS $13.33, Est. $9.300 - free cash flow for the first quarter of $4.34 billion. - 1Q Google Other Rev. $4.35B - 1Q Rev. Ex-TAC $24.9B, Est. $24.3B - Capital expense for Google more than triples: up from $2.4 billion to $7.7 billion year-on-year. That probably reflects spending on hardware, including the Nest division. - Porat says that CapEx was "almost completely split" between paying for machines ("compute capacity") and paying for real estate. - Without Nest, the "Other Bets" operating loss narrowed to $571 million from $703 million a year earlier. - The company has discussed making annual stock grants to executives and other employees in the first quarter, and it's not clear yet how much that dragged down Alphabet's operating profit. Ads - 1Q Paid Clicks +55% - Our first new glimpse at Google's network business: impressions on Networks sites stayed flat for the quarter, but the cost-per-impression went up 18 percent. Translation: Google is getting steady growth out of its display business. Misc: - added nearly 5,000 employees in the quarter, to 85,050 as of March 31. That works out to more than 50 new hires a day in a 90-day quarter. - Porat also says the company has been working on the GDPR compliance for 18 months. "We've changed our policy as needed. We are also providing users with strong user controls and privacy settings and privacy check ups," she told Bloomberg Television. - Porat says Waymo has achieved 5 million miles of driving on city streets.
- tristanj 8y ago>Capital expense for Google more than triples: up from $2.4 billion to $7.7 billion year-on-year Part of that also comes from Google buying up $1 billion of north Sunnyvale properties over the past year [0]. They bought roughly 50 properties. The article [0] has a nice map that shows since July 2017 Google has bought up roughly half of the Sunnyvale Moffet Park area. I am mildly surprised how little coverage Google's buying spree has received. [0] https://www.mercurynews.com/2017/12/22/google-expansion-quest-produces-sunnyvale-city-land-deal/ https://www.mercurynews.com/2017/12/22/google-expansion-ques...
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- gwern 8y ago
- sjilo 8y agoHow does a company like Alphabet have so much space to grow at this point?
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- aphextron 8y agoThey didn't grow. They got a tax cut.
- s17n 8y ago26% revenue increase YoY
- product50 8y agoTheir revenue grew 26% yoy. That has nothing to do with tax cuts. Stop letting your confirmation bias cloud your judgment.
- jacksmith21006 8y agoWhat? Google grew over 25%. Which is just accelerating as numbers get bigger.
- trillic 8y agoKeep expanding into more and more markets. Google has had over 90% of the search market for almost 10 years. Android barely existed 10 years ago.
- candiodari 8y agoProgrammatic is a big part of it (read: Youtube). It means that the ads business on Youtube has made massive strides in the past year. That's not the only thing, but it's a big part of it.
- aphextron 8y ago>Effective tax rate 11% Absolutely obscene. Literally their entire Net Income increase from $5.4b to $9.4b is due to a tax cut from 20%. We will be paying for this Republican tax policy for the rest of our lives.
- l1ambda 8y agoThe US corporate tax rate is now more in line with the OECD average: https://taxfoundation.org/us-corporate-income-tax-more-competitive/ https://taxfoundation.org/us-corporate-income-tax-more-compe...
- alwaysthrowaway 8y agoNote that many US states have their own corporate income tax levies as well. California charges about 10% I believe. Thus a corporation domiciled in California is still paying a corp tax rate about as high as any in the world.
- jorblumesea 8y agoBut with just as many loopholes and ways to get around being taxed. Not sure what the tax rate even means if no one pays it anyways. Fixing our corrupt system is the real solution.
- alwaysthrowaway 8y agoUS tax system has very few loopholes. Double Irish / Dutch sandwich avoid EU taxes, not US. US tax on foreign income can be deferred - indefinitely - as it is only paid when the money is repatriated. But to truly avoid US corp tax is generally pretty limited (leasing IP from a foreign company etc). For example: If US company X makes $100B in foreign income in 2017 and repatriates that income in 2019, they will book 0% tax paid in 2017. Similarly, if X pays income tax to a foreign government they will receive credits for tax already paid - but due to accounting practices the US government will not count the credits when publishing the effective tax rate of X. That last point isn't germane to this particular article but it is something behind many of the 'Look at the low tax rate of X' articles you will see around.
- alberth 8y agoTheir efficiency is impressive. On an annualized basis, they are doing ~$120B. They have ~85k employees. That means they are generating ~1.5M Revenue Per Employee. That's crazy
- kgwgk 8y agoIf anyone is curious about what companies in the S&P 500 rank higher in the revenue per employee metric: https://craft.co/reports/s-p-500-revenue-per-employee-perspective https://craft.co/reports/s-p-500-revenue-per-employee-perspe...
- ghazak 8y agoThat kinda revenue with those profit margins are the insane thing. I’m less impressed at revenue per employee generated from oil.
- kgwgk 8y agoOperating margin is 22%, not bad (better than many, probably most, of the companies on that list) but not insane. Apple is better on both metrics.
- bob_theslob646 8y agoNot a far comparison considering the size of some of the companies. Definetely needs to be weighted. An example, Murphy Oil Corporation has 1,294 employees... Also another interesting trend is how many healthcare companies are in that list.
- aaavl2821 8y agoHealthcare is just under 20% of US GDP and 20% of the companies are in healthcare AmerisourceBergen is a drug distributor / wholesaler, so they have huge revenues bc they sell expensive drugs, but they don't capture much of that (their net income is negative) Express scripts is a PBM and highly profitable. I don't really know what PBMs do at a useful level of detail, but their profitability has been a subject of debate as pharma companies blame them for high prices. They basically aggregate demand for drugs and negotiate prices on behalf of payers, and make money on their ability to do so Gilead had one of the best selling drugs of all time, that did $5B in revenue in the first quarter of launch, and $20B+ in the first year I think. Since then rev has declined but still massive The insurance companies get lots of rev from premiums but margins are low Biogen and celgene also have one or two drugs that do $5-10B / year Should note that drugs only account for 10% of health spend. The biggest driver of healthcare costs -- hospital care (30%) and physician services (20%) don't show up in this chart bc they are fragmented industries and also human-capital intensive
- obilgic 8y agoeps doubles and shares are down...
- kgwgk 8y agoEPS doubles (actually grows 72%) due to some one-time adjustments. Revenue is up 26% year-over-year. Operating income is up 6.6% year-over-year. The stock is up ~25% over the last 12 months, by the way.
- tedunangst 8y agoProfit margin is down, 27 to 22.
- jacksmith21006 8y agoStrong quarter again for Google. Pretty amazing to grow faster as the numbers get bigger.
- simonebrunozzi 8y agoMy bet is that Google is poised to become a strong market protagonist in the Public Cloud / Infrastructure space, within the next few years. I have admired the stability and the maturity of their technology platform since my AWS days.
- drusepth 8y agoI have had nothing but good experiences in using Google Cloud. The only issues I've had is in other tools/libraries being specifically targeted at AWS and not working with other tools. Seems like the kind of thing that fixes itself as GC gets bigger / more used.
- Yeroc 8y agoIt'll be interesting to see how things play out. In the enterprise space the only two I hear companies talk about it Azure & AWS...