6 ms·

Alphabet Announces First Quarter 2019 Results

84 points by kgwgk 8y ago

asaph 8y ago
Looks like Wall Street is considering this one a miss. $GOOG is down 6% in after hours trading.
- azhenley 8y ago
  And still falling. -7% now.
- gniv 8y ago
  After going up by the same amount in the last two weeks. I've seen this pattern in previous quarters: irrational increase in the days before earning, then a fall back to the same price. Not sure what's happening, could be option/day traders.
  - zrail 8y ago
    This has been a thing on the stock market for a very long time and is not Google-specific. Basically every ticket is going to see action prior and subsequent to earnings reports.
  - bduerst 8y ago
    The entire market is up the last two weeks. It's not irrational if you view it in context to the rest of the market activity.
  - duality 8y ago
    Is this "buy the rumor, sell the news" in action?
    - FartyMcFarter 8y ago
      What was the rumor?
      - dredmorbius 8y ago
        Whisper number.
- DeonPenny 8y ago
  More of a sell the new situation
azhenley 8y ago
For those that are more apt at understanding these reports, could you provide us a summary?
- reallydude 8y ago
  Yahoo has a fine TL;DR - https://finance.yahoo.com/news/alphabet-google-first-quarter-2019-earnings-results-191938683.html https://finance.yahoo.com/news/alphabet-google-first-quarter...
writepub 8y ago
For a summary, try Reuters: https://www.reuters.com/article/us-alphabet-results/alphabet-first-quarter-revenue-misses-estimates-idUSKCN1S521N https://www.reuters.com/article/us-alphabet-results/alphabet... Eventually, It'll be hard to not argue that some part of revenue and profit misses arise from activism against serving the US government, or opening a China search engine. At that point, will Google choose to pursue business interests or pander to activists?
jcfrei 8y ago
My handwaving analysis would be that advertising around search is slowing and instead mostly growing around content - this is because the web has matured and users are now educated on what it has to offer. They spend less time searching and browsing the web and instead spend most of the time consuming content (via streaming services and social feeds) through established platforms (youtube, instagram, netflix, spotify, twitch, etc.). And Alphabet's main content platform youtube is somewhat harder to monetize.
- tyingq 8y ago
  "advertising around search is slowing" I think it's just finally tied directly to growth of internet use. Their YoY gains used to exceed it because they were grabbing more above the fold space every year, experimenting with different ad looks, etc. I believe the well of new tricks is drying up... everything above the fold is an ad now for high value queries. That's not a bad place to be.. it's just not as comparatively nice as consistently doing better than general growth. I suppose one caveat is that they make less on mobile ads versus desktop, and desktop share continues to shrink.
- robertAngst 8y ago
  I don't think I've ever used google so much. The search feature in particular. Even navigating my own website is faster with a google search than to click on 3 links.
- danielcampos93 8y ago
  acquition cost.
xiphias2 8y ago
For me in the past few years Waymo was the most interesting growth part of Alphabet, but after the Tesla presentation I feel that Tesla is in a better position because of the amount of edge cases they can gather for their models.
- notfromhere 8y ago
  Tesla FSD is vaporware that exists just to pump the stock.
  - DeonPenny 8y ago
    Waymo is more likely vaporware. Traditional ML isn't going to work for all the edge case. Tesla has thousands of cars on the road. The Tesla Deep learning play is the only way this is going to work
    - cromwellian 8y ago
      ML without hardware side radars or redundancies like high resolution maps in the areas they operate is what isn’t going to work. Name a deep neural net with anywhere close to 100% object recognition precision/recall. You’re engaging ins hand waved reality distortion from musk that somehow their cheap low quality sensorsuite with gaps that they shipped hundreds of thousands of, can be patched over by software and be made to drive across country and service millions of people in robotaxis one year from now despite the fact that they haven’t even filed any significant l4 miles with disengagement reports? This seems like a market rush disaster waiting to happen. You don’t ship mvp/beta of software that can kill people so you can gather training data.
      - DeonPenny 8y ago
        1. You can get 89% accuracy with a convolutional LSTM https://arxiv.org/pdf/1411.4389.pdf https://arxiv.org/pdf/1411.4389.pdf 2. You get multiple bites of the apple the chip is processing 200 images a second. It had plenty of sign in the next frame to identify an issue. 3. All Tesla have redundant side sensors and radars, and an adversarial system for checking it's conclusions. 4. Having don't actually need to file those things in Tesla case. Why would you? They could easily test the functionality and tell no one and not worry about the regulation until they've passed a certain amount of accuracy. 5. The beta is navigation on autopilot and it's proven to be safer than regular drivers by far. And most importantly what do you think will happen if elon release. Self driving on local roads in a year. Other than that what more would the car need to do. Be able to do that without people touching the wheel. If he just release that as a "feature" and it works there won't be a marketing issue. In fact he already has.
telltruth 8y ago
TLDR; Revenue increased by 19% which didn't met the growth expectations because same quarter last year revenue growth was 26%. If you don't take fines in to account margin is improved and paid clicks are increased by 39% but the cost per click went down to 19% yoy which seems to be the big factor in missed expectation for the growth. GOOG headcount went up from 85K to 103K yoy. GOOG is getting beaten right now with analysts because Amazon and FB are being perceived to have done much better with their ad business. People on TV are asking to reduce costs, investments like Waymo and monetize properties like maps. They seem to have lost faith in further growth in Google's ad business due to increasing competition from FB and Amazon.
- e12e 8y ago
  I must say, nearly 20% quarterly revenue increase sounds pretty amazing for such a large company (I guess not every quarter is equal - but 20% increase every quarter means a doubling of revenue year to year). Is this typical for all the big tech players? Is it really not crazy - is the market(s) still expanding that much?
  - myroon5 8y ago
    Earnings reports are quarterly, but the growth rates mentioned are annual growth rates
  - danielcampos93 8y ago
    To many, investing is not about the now but the future. Looking at googles curves revenue growth is slowing and costs are growing. Numbers look great right now but meh in the future.
  - MarkMc 8y ago
    It's not doubling every year. Revenue is up 17% compared to Q1 2018
JabavuAdams 8y ago
Is anyone else amazed that they added almost 20k employees since last year? How?
- zachberger 8y ago
  As stated on past earnings calls, the growth has been driven by Google Cloud in both technical and sales roles. https://www.forbes.com/sites/jilliandonfro/2019/02/04/google-parent-alphabet-reports-surge-in-spending-and-hiring-hitting-nearly-100000-employees/#1fa850de72e8 https://www.forbes.com/sites/jilliandonfro/2019/02/04/google...
outside1234 8y ago
Look at all of those employees!! What are 100k employees doing at Google? Especially since they have a fairly weak field team.
claydavisss 8y ago
The Pixel phones aren't selling. They hinted at that. I own a Pixel3XL. Google started discounting them very soon after the product was released. This is a mistake - it makes it look like Google is just trying to clear inventory rather than establish their brand. If they aren't even selling with a discount...wow, that's bad news for Google. Google's unwillingness to have a retail presence is a major issue. Amazon, Apple and Microsoft all have stores in major metros. If my Pixel3XL failed, I would have to mail it in to Google which probably means I have to buy another phone to use in the meantime. Yuck. With an iPhone, you drive down to the Apple store and get help that day. Looking forward, my guess is the Pixel3 will stay on the shelves a year longer than planned and there will never be a Pixel4. Google has wasted an incredible amount of money failing in hardware.
MarkMc 8y ago
Putting aside the EC fine, operating expenses grew 19.2% year-on-year while revenue only grew 16.7% year-on-year. This is clearly not sustainable - if it continues expect to see some belt-tightening at Google.

84 points by kgwgk 8y ago

asaph 8y ago

Looks like Wall Street is considering this one a miss. $GOOG is down 6% in after hours trading.

azhenley 8y ago
And still falling. -7% now.
gniv 8y ago
After going up by the same amount in the last two weeks. I've seen this pattern in previous quarters: irrational increase in the days before earning, then a fall back to the same price. Not sure what's happening, could be option/day traders.
- zrail 8y ago
  This has been a thing on the stock market for a very long time and is not Google-specific. Basically every ticket is going to see action prior and subsequent to earnings reports.
- bduerst 8y ago
  The entire market is up the last two weeks. It's not irrational if you view it in context to the rest of the market activity.
- duality 8y ago
  Is this "buy the rumor, sell the news" in action?
  - FartyMcFarter 8y ago
    What was the rumor?
    - dredmorbius 8y ago
      Whisper number.
DeonPenny 8y ago
More of a sell the new situation

azhenley 8y ago

For those that are more apt at understanding these reports, could you provide us a summary?

reallydude 8y ago
Yahoo has a fine TL;DR - https://finance.yahoo.com/news/alphabet-google-first-quarter-2019-earnings-results-191938683.html https://finance.yahoo.com/news/alphabet-google-first-quarter...

writepub 8y ago

For a summary, try Reuters: https://www.reuters.com/article/us-alphabet-results/alphabet-first-quarter-revenue-misses-estimates-idUSKCN1S521N https://www.reuters.com/article/us-alphabet-results/alphabet... Eventually, It'll be hard to not argue that some part of revenue and profit misses arise from activism against serving the US government, or opening a China search engine. At that point, will Google choose to pursue business interests or pander to activists?

jcfrei 8y ago

My handwaving analysis would be that advertising around search is slowing and instead mostly growing around content - this is because the web has matured and users are now educated on what it has to offer. They spend less time searching and browsing the web and instead spend most of the time consuming content (via streaming services and social feeds) through established platforms (youtube, instagram, netflix, spotify, twitch, etc.). And Alphabet's main content platform youtube is somewhat harder to monetize.

tyingq 8y ago
"advertising around search is slowing" I think it's just finally tied directly to growth of internet use. Their YoY gains used to exceed it because they were grabbing more above the fold space every year, experimenting with different ad looks, etc. I believe the well of new tricks is drying up... everything above the fold is an ad now for high value queries. That's not a bad place to be.. it's just not as comparatively nice as consistently doing better than general growth. I suppose one caveat is that they make less on mobile ads versus desktop, and desktop share continues to shrink.
robertAngst 8y ago
I don't think I've ever used google so much. The search feature in particular. Even navigating my own website is faster with a google search than to click on 3 links.
danielcampos93 8y ago
acquition cost.

xiphias2 8y ago

For me in the past few years Waymo was the most interesting growth part of Alphabet, but after the Tesla presentation I feel that Tesla is in a better position because of the amount of edge cases they can gather for their models.

notfromhere 8y ago
Tesla FSD is vaporware that exists just to pump the stock.
- DeonPenny 8y ago
  Waymo is more likely vaporware. Traditional ML isn't going to work for all the edge case. Tesla has thousands of cars on the road. The Tesla Deep learning play is the only way this is going to work
  - cromwellian 8y ago
    ML without hardware side radars or redundancies like high resolution maps in the areas they operate is what isn’t going to work. Name a deep neural net with anywhere close to 100% object recognition precision/recall. You’re engaging ins hand waved reality distortion from musk that somehow their cheap low quality sensorsuite with gaps that they shipped hundreds of thousands of, can be patched over by software and be made to drive across country and service millions of people in robotaxis one year from now despite the fact that they haven’t even filed any significant l4 miles with disengagement reports? This seems like a market rush disaster waiting to happen. You don’t ship mvp/beta of software that can kill people so you can gather training data.
    - DeonPenny 8y ago
      1. You can get 89% accuracy with a convolutional LSTM https://arxiv.org/pdf/1411.4389.pdf https://arxiv.org/pdf/1411.4389.pdf 2. You get multiple bites of the apple the chip is processing 200 images a second. It had plenty of sign in the next frame to identify an issue. 3. All Tesla have redundant side sensors and radars, and an adversarial system for checking it's conclusions. 4. Having don't actually need to file those things in Tesla case. Why would you? They could easily test the functionality and tell no one and not worry about the regulation until they've passed a certain amount of accuracy. 5. The beta is navigation on autopilot and it's proven to be safer than regular drivers by far. And most importantly what do you think will happen if elon release. Self driving on local roads in a year. Other than that what more would the car need to do. Be able to do that without people touching the wheel. If he just release that as a "feature" and it works there won't be a marketing issue. In fact he already has.

telltruth 8y ago

TLDR; Revenue increased by 19% which didn't met the growth expectations because same quarter last year revenue growth was 26%. If you don't take fines in to account margin is improved and paid clicks are increased by 39% but the cost per click went down to 19% yoy which seems to be the big factor in missed expectation for the growth. GOOG headcount went up from 85K to 103K yoy. GOOG is getting beaten right now with analysts because Amazon and FB are being perceived to have done much better with their ad business. People on TV are asking to reduce costs, investments like Waymo and monetize properties like maps. They seem to have lost faith in further growth in Google's ad business due to increasing competition from FB and Amazon.

e12e 8y ago
I must say, nearly 20% quarterly revenue increase sounds pretty amazing for such a large company (I guess not every quarter is equal - but 20% increase every quarter means a doubling of revenue year to year). Is this typical for all the big tech players? Is it really not crazy - is the market(s) still expanding that much?
- myroon5 8y ago
  Earnings reports are quarterly, but the growth rates mentioned are annual growth rates
- danielcampos93 8y ago
  To many, investing is not about the now but the future. Looking at googles curves revenue growth is slowing and costs are growing. Numbers look great right now but meh in the future.
- MarkMc 8y ago
  It's not doubling every year. Revenue is up 17% compared to Q1 2018

JabavuAdams 8y ago

Is anyone else amazed that they added almost 20k employees since last year? How?

zachberger 8y ago
As stated on past earnings calls, the growth has been driven by Google Cloud in both technical and sales roles. https://www.forbes.com/sites/jilliandonfro/2019/02/04/google-parent-alphabet-reports-surge-in-spending-and-hiring-hitting-nearly-100000-employees/#1fa850de72e8 https://www.forbes.com/sites/jilliandonfro/2019/02/04/google...

outside1234 8y ago

Look at all of those employees!! What are 100k employees doing at Google? Especially since they have a fairly weak field team.

claydavisss 8y ago

The Pixel phones aren't selling. They hinted at that. I own a Pixel3XL. Google started discounting them very soon after the product was released. This is a mistake - it makes it look like Google is just trying to clear inventory rather than establish their brand. If they aren't even selling with a discount...wow, that's bad news for Google. Google's unwillingness to have a retail presence is a major issue. Amazon, Apple and Microsoft all have stores in major metros. If my Pixel3XL failed, I would have to mail it in to Google which probably means I have to buy another phone to use in the meantime. Yuck. With an iPhone, you drive down to the Apple store and get help that day. Looking forward, my guess is the Pixel3 will stay on the shelves a year longer than planned and there will never be a Pixel4. Google has wasted an incredible amount of money failing in hardware.

MarkMc 8y ago

Putting aside the EC fine, operating expenses grew 19.2% year-on-year while revenue only grew 16.7% year-on-year. This is clearly not sustainable - if it continues expect to see some belt-tightening at Google.