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Alphabet Announces First Quarter 2022 Results
- chollida1 5y agoNumbers: - Q1 EPS $24.63 Est 25.71 - Q1 Add Rev $54.66B, Est $54.14B - Q1 Cloud Loss of $931M, still not sure how they can't compete with Azure and Amazon here? This is a slight improvement YoY. Though cloud revenue was up 43% - Q1 Services Rev of 61.47B - Q1 Other Bets lost $1.16B - Q1 Other Bets Rev $440M - Q1 Re $68.01, Est $67.98 - looks like they are reporting a loss(1.2B) this quarter, which is a big swing YoY where they made a profit of 4.9B - youtube Add Rev 6.9B, bit of a miss here, TikTok is starting to affect google growth finally, they already have affected Meta's add revenue, maybe related also to iPhone privacy changes? - Authorized to buyback up to $70B in shares, that's a large number and indicates someone at google thinks rev is slowing down, see TikTok Misc: - shares down slightly, but negligible. - numbers for Q1 shouldn't be affected by Russia but next quarter will be interesting - want to see how their US vs rest numbers work out as that should indicate where they'll hold cash and therefor where they'll look for take over targets next. - specifically for their cloud offering, sooner or later they'll get it working - note to watch Meta as alot of people will use GOOG advertising numbers as a proxy for how screwed META will be with the iPhone privacy changes going forward.
- richardwhiuk 5y ago> - looks like they are reporting a loss(1.2B) this quarter, which is a big swing YoY where they made a profit of 4.9B I don't see this in the statement?
- gniv 5y agoAs others have said, this is just loss form investments, due to the general market correction. If you want to see it in the press release, look for "Other income" in the press release (the most interesting part is on page 9).
- bryanrasmussen 5y agodidn't Google announce a year or two ago that Cloud had 5 years to make a certain amount or it was gone?
- dekhn 5y agono. that was a tabloid claim based on iffy data. Cloud's main products (compute, storage, databases, load balancers, etc) aren't going anywhere.
- toomuchtodo 5y agoDoes Google dogfood cloud? Or is it compartmentalized from internal service infra?
- cmrdporcupine 5y agoBoth. In reality almost all of Google is hosted on Borg. But I worked briefly on a project that was heavily interlinked between the two. I believe there's been more efforts to move things into GCP.
- dijit 5y agoAfaik even “google cloud” itself runs atop Borg.
- jeffbee 5y agoWhere else would it run? G runs lots of small things on cloud but a company that is willing to fund 0.1% global efficiency efforts is never going to sacrifice far larger efficiency regressions just for the aesthetic pleasure of dogfooding cloud for major services like websearch.
- dekhn 5y agoYou can do some stuff on cloud; for example, for a few minor projects where we needed to make some web pages, we used GCP. However, it wasn't well integrated with internal, it was effectively just a web site like any other. I believe there had been multiple waves of attempting to get people to move to cloud, but at the time, there was no coherent strategy to move large parts of the tech stack to cloud. Unfortunately with any sufficiently complex production service that runs in borg, untangling the web of dependencies is usually too hard. Other things work great in the cloud; if I was a Google Researcher working on public data and publishing papers, I'd intentionally use Google Cloud (with access to VMs, CPUs, and GPUs, but not any internal data like the web page crawls) with Jax, Keras, TF, etc.
- kvathupo 5y agoTempted to sell at a loss, as opposed to waiting for the split at this point
- midasuni 5y agoIf you own 10 at 2000 or it splits 10:1 and you own 100 at 200, what difference does the split make? (Obviously you can buy and sell smaller units but aside from that)
- rubiquity 5y agoRetail traders that started "investing" in the last two years have been trained to believe that stock splits means a bunch of money will pile in because the price looks cheaper. Obviously there has never been a correlation there and even less so now with the wide availability of fractional shares.
- mupuff1234 5y agoI heard it might also mean that it can then be added to the dow index which might trigger some automatic buying?
- rubiquity 5y agoI'd expect that to be negligible because the size of funds Google is already part of (QQQ, VTI, SPY, etc. etc.) are orders of magnitude larger than ETFs that track the Dow (DIA is the only one that comes to mind). The Dow itself is a bit of gimmick in that its value is the sum of all the prices of the stocks in the index. Meaning if Google joins at $120 but kicks out a stock that was $300 then the Dow would go down 180 points.
- hasty 5y agoNo, it wouldn't. The Dow is weighted for exactly this reason: https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average#Calculation https://en.wikipedia.org/wiki/Dow_Jones_Industrial_Average#C...
- tempnow987 5y agoDoes Add = Ad?
- jljljl 5y ago> - looks like they are reporting a loss(1.2B) this quarter, which is a big swing YoY where they made a profit of 4.9B You are looking at Other Expenses/Gains. The bottom line net income was 16,436 vs 17,930 LY -- so still a Net Profit, but down 8% YoY
- aliston 5y agoIf you look deeper, though, the biggest difference is actually in "other income" which itself was primarily driven by gain/loss in securities. In other words, the entire difference in net income this quarter is really a result of the markets tanking over the past few months. Google's operations are as profitable as ever.
- colinmhayes 5y agoGoogle's net income is up 35% if you ignore the equity numbers. Not only is Google as profitable as ever, it's quite a bit more profitable than it has been. I fully expect GOOG to open up tomorrow, maybe even climb higher than today's open.
- jsnell 5y agoThat doesn't sound right. The operating income grew from 16.4B to 20.1B. That's 21%, not 35%?
- colinmhayes 5y agoI'm counting net income less gains from equities. $13 billion last year to $17.5 here. You're right though, probably should've just looked at change in operating income which is still a strong 21%.
- deleted 5y ago[deleted]
- owlninja 5y ago> Authorized to buyback up to $70B in shares, that's a large number and indicates someone at google thinks rev is slowing down, see TikTok Good for shareholders?
- mupuff1234 5y ago> that's a large number and indicates someone at google thinks rev is slowing down I thought buybacks were supposed to show a sign of trust in the company and that they believe the stock is "cheap"?
- vannevar 5y agoYes, seems like a bad move to buy stock if you expect it to go down.
- bombcar 5y agoBuybacks are submarine dividends, it means the company doesn't know what to do with the money to grow so they're giving it back to the shareholders.
- Mikeb85 5y agoBuybacks and dividends are literally the way public markets are supposed to work. Raising capital without ever giving it back = a ponzi scheme. Anyhow buybacks are a way to give money back to investors while making each remaining share more valuable.
- bduerst 5y agoShrinking float and lowering the cost of capital is still better than sitting on a pile of excess cash. Buybacks are a valid tactic in corporate finance.
- baskethead 5y ago> - shares down slightly, but negligible. As of right now, shares are down $120, after being down $80 during the trading session so it's pretty huge.
- davidbarker 5y agoAnecdotally, I spend a reasonable amount of time on YouTube (perhaps an hour per day), and recently (6–12 months) the frequency of ads has noticeably increased. It’s so notable that I can’t help but think overall watch time has flattened but they’re desperate to continue increasing revenue. Although at some point they’re likely to go into a downward spiral where they annoy too many users. I’m not there yet, but I’m on the trajectory.
- bombcar 5y agoThe ads have increased and the number of different ones have decreased; either they have less purchasers for ads for my demographic or something's going weird. I only need so many ads for "current SAAS desperation".
- davidbarker 5y agoNow you mention it, I’ve noticed the same. It feels like 80% of the ads I see are for HelloFresh, Monday.com, or Grammarly.
- guyzero 5y agoBusinesses with high long-term customer value and high customer acquisition costs will always dominate these sorts of transactional ad channels.
- progre 5y agoFor me, I think the type of ads have shifted a little bit too. Less German cars and carbonated sugar drinks (big brand ads) and more Home Shopping Channel type ads. And Get Rich Quick While Working From Home-testimonials.
- redmen 5y agoshares down negligible? It's down 6% after hours, and was down 4% intraday which took no wind out of the sails.
- arberx 5y agolol I was going to say...
- dijit 5y ago> still not sure how they can't compete with Azure and Amazon here? People go AWS because it’s the default, easy to hire people who know it, AWS are willing to throw credits at you if you’re in the US and once you’re on the platform it’s a serious effort to get off due to weird lock-ins. Azure has its niche in the windows market, a lot of smaller orgs are going AzureAD as a replacement (or in addition to) a normal on-prem AD solution, once you’re on the platform it’s easy to just use more of it and consume existing contracts. It helps immeasurably that if you’re running windows workloads they “happen” to be reasonably priced, as opposed to other cloud providers. It’s a shame, because google cloud is definitely my favourite of the public clouds, I hope it doesn’t go anywhere and I’d be extremely happy to go back to it after using AWS for a while now.
- deanCommie 5y agoIMO: * AWS makes the best 0th impression (the whole "nobody gets fired for choosing AWS" and as you said you can justify it based on absolutely no knowledge of it's details just purely on reputation) * Google makes the best 1st impression, by the virtue of it's beautiful consistency of behaviour, SDK standardization, clean billing models, and overall cross-platform cohesion. It just seems like you can learn GCP faster at first. * But AWS makes the best 2nd and subsequent impressions, as you realize consistency and clarity lacks the depth of AWS, or the true productivity gains by native services - native services Google has mostly rejected in favour of doubling down on it's K8S offering as a differentiator. While GCP can seem faster to learn, in practice building on AWS is actually faster and you can go build new full applications from scratch that you're happy operating in production quicker.
- simsla 5y agoI'd challenge that. Used to work with AWS, now with GCP. - They both throw credits at companies. - Services are similar. - Prices are similar, although Google sometimes has silly costs for "enabling" a service/API. - GCP dashboard is snappier. - AWS has good support. I'd wager the quality of support is the main differentiator.
- dijit 5y ago
- rtall 5y ago
- leokennis 5y agoRegarding GCP my gut feeling is Google is way too unpredictable and quick to cancel products to seriously attract big enterprises. Anecdotally their Google Workspace offering however almost seems to be the default for smaller business that are not IT oriented or have a separate IT department.
- EnKopVand 5y agoIt has a lot more to do with how bad they are at selling IT to enterprises in my experience from the European public sector, which is now a very large Azure and AWS market. We went with Azure because it was the sort of “obvious” direction for a non-tech enterprise organisation that was already heavily windowsy and using office365, but what Microsoft and Amazon sell to enterprises is support. AWS didn’t start out so well here in Europe, which is what gave Azure the chance to catch up, but once Amazon caught on, they became more compliant with European legislation than Microsoft is. Things like guaranteeing that every employee that comes near your data is an European citizen, is one area where AWS is still better than Azure, but basically what they do that Google doesn’t, is that they listen and adopt to the needs of the trillion dollar industry. When Teams rolled out as a new feature in Enterprise 365, as available to everyone, our techies called Seattle (I can’t spell redmund) and a few days later it was possible to not have it auto-available for everyone. When we had issues with Google education, and Google education was actually Google’s best attempt at being supportive of enterprise, we had to talk with a chatbot and eventually had to physically drive to Google Denmark to annoy someone to get real support because our sales rep was on vacation. I’m not sure if you know this, but a major part of selling IT to enterprise is to sell the CTOs the ability to say “yes, email is down, but our guys are working directly with the people at Amazon/Microsoft headquarters and they are calling us with updates every 30 minutes.” or “yes our servers are in Ireland, but some of our best techies have gone and physically inspected them with the EY consultants and our DPO firm and it was completely GDPR compliant”, and all the other stuff you get to do when you make the companies billions.
- pkaye 5y agoThat is interesting about Google support because a while back I had some issues with my Google home devices so I was browsing their help guides and a popup asked if I need to speak with technical support. One click and 30s later someone was one line and spent 30m fixing my device issue. Not bad for something I spend $100 on.
- trenning 5y agoAn aside comment I wanted to say thanks for doing these posts after earnings announcements. It’s been a while since you’ve done one and I always appreciate seeing them.
- bufferoverflow 5y ago> Authorized to buyback up to $70B in shares, that's a large number and indicates someone at google thinks rev is slowing down, see TikTok Isn't it the opposite? It means Google thinks their stock will be undervalued, and they want to buy it back?
- christophilus 5y agoDepends on whether you have good capital allocators at the top. Most companies don’t, really.
- rabidonrails 5y agoAlthought 70B is a large number and based on the anti-trust lens that GOOG is under I wonder if they think this is a better way to return money to the shareholders than inviting DOJ scrutiny.
- user3939382 5y agoThe political corner of YouTube that I spend the most time on probably isn’t even on their radar, but it’s gotten to the point where almost every channel I subscribe to often mentions their out of band content on Rumble, Rokfin, Substack, etc because YouTube has been demonetizing left and right.
- bmarquez 5y agoOh yeah some creators are afraid of demonetizing (even though they're non-political, they're afraid the algorithm might accidently trigger on them) so they'll tell their viewers about their backup Odysee or Rumble page. It turns out there are fewer ads on their backup pages so I tend to watch there instead on YouTube.
- colinmhayes 5y agoThe big number to me, Gain (loss) on equity securities, 2021:4,837 2022:(1,070) I don't think their equity gains/losses have anything to do with future business outlook, so ignoring this $6 billion loss YOY I'd say this was a fantastic quarter for them. They could show more in some of their non search sectors, but excluding that equity number went fro. $13 billion in profit to $17.5 for a 35% gain.
- deleted 5y ago[deleted]
- gigatexal 5y agoWhat’s this 1.2B loss you speak of? I don’t follow
- paulryanrogers 5y ago"Add Rev" as in advertising revenue?
- sidcool 5y agoTheir investment in research and development has increased by $1 billion. This is good news. GCP should be a concern for the. More than a decade in and it's still facing losses. But cloud is a long game.
- tommiegannert 5y ago> Q1 Cloud Loss of $931M, still not sure how they can't compete with Azure and Amazon here? If you haven't analyzed the revenue and expense, this number doesn't say anything. Thay may willingly be spending more to grow, but could change stance and be profitable on Monday if they wanted to. These are numbers that sound like output, but my guess is someone had a "revenue+$1B" budget, and they spent it. I have no clue if that's the case, but it would surprise me if Google Cloud is inately unprofitable.
- donsupreme 5y agoI fear for Meta tomorrow
- gpt5 5y agoMeta is already trading at a much lower P/E than Google, so it’s fair to say that it’s priced in.
- productceo 5y agoGoogle Cloud Platform is losing less money!
- blagie 5y agoA billion dollars a quarter. That's a pretty big loss. I don't see that dog turning around. Trust is slow to earn and quick to lose. Google has burned enough potential customers that I can't see them gaining or keeping market share without significant subsidies. If I can get AWS or Azure for anywhere close to the same price, that's where reasonable folks will go. To be honest, I'm surprised Google hasn't cut-and-run yet. Probably too much ego on the line. Ideally, they should sell their customers to the highest bidder, and offer an easy transition. GCP customers would probably tip Azure to be bigger than AWS, depending on which metric you go by.
- rubiquity 5y agoGoogle is obviously still a very strong business but in terms of stock price performance all that matters right now is forward guidance. Meta signaled last quarter that their macro outlook was that ad spend was going to decline. That seems plausible, especially for ads targeted at consumers who are getting hit by inflation. Google might be plateauing and all the stock buybacks in the world might not help even at the current multiples that are much more appealing than 6 months ago. We shall see.
- baskethead 5y agoThe reason why forward guidance matters is because of valuations. Google PE is over 20 as of close of day. Entire S&P 500 PE is 15 and even that is traditionally high. If Google's PE reverts to the S&P500, you're talking a 20% cut just from here. Forward guidance and consistent growth is what mutual funds will pay a premium for. Lots of companies have a ton of room to drop if PE ratios drop.
- HFguy 5y agoFWIW, sp500 forward pe more like 18
- riku_iki 5y ago> Entire S&P 500 PE is 15 Google demonstrates steady 25% y/y grows for 20 years already, most of SP500 probably doesn't.
- colinmhayes 5y agoWhich is why guidance matters... Most companies are just expected to grow barely faster than inflation, which isn't too hard. But companies with high PE are expected to grow much faster. It's not this quarters revenue that matters, but future ones. Guidance is about future quarters. Sour guidance means you're no longer a rocketing tech company.
- jsnell 5y ago> all that matters right now is forward guidance Have they ever offered guidance? I thought they didn't do it basically as a matter of policy. So it seems hard to believe that it's what matters.
- tequila_shot 5y agoHarbinger of the upcoming FB first quarter results.
- galogon 5y agoWhy is Apple's market cap so much higher than Microsoft and Alphabet? -Google: Search and YouTube are essential in everyone's lives. -Microsoft, the entire business world depend on their apps and services. The world wouldn't run without Azure, Windows and Office. Their businesses are bulletproof. Apple on the other hand is completely dependant on China and you never know when a supplier drops the ball somewhere in the chain.
- tmsh 5y agoThey capture a lot of slices of: mobile. More words: https://www.youtube.com/watch?v=0QbG1wOQw8g https://www.youtube.com/watch?v=0QbG1wOQw8g.
- rcMgD2BwE72F 5y ago>Microsoft, the entire business world depend on their apps and services. The world wouldn't run without Azure, Windows and Office. Funnily, no one at the office (a dozen colleagues, in a European software editing company) and in my family uses any Microsoft service – except for LinkedIn, Github and npm.
- colinmhayes 5y agoEvery fortune 500 company I've interacted with has a contract for microsoft's productivity suite. As they continue down the "github is the entire productivity suite for developers" that will only continue. The lock in they've got provides incredible value, and IMO is the main reason azure is even kind of successful.
- epolanski 5y agoNone of my previous employers was MSFT free. Not one. Sharepoint especially is killer software for any non trivial org.
- leokennis 5y agoMight it be because everyone and their mum have an iPhone and iPad and the profit margin on that hardware alone on that scale are super high?
- deleted 5y ago[deleted]
- newshorts 5y agoThe real harbinger here is ad spend. Can't all be TikTok disruption, what we are seeing (IMO) is an indication of broad market slowdown. Companies cut ad spend first.
- baskethead 5y agoWith supply chain issues, there's no point in advertising goods that you can't sell, so it makes sense.
- colinmhayes 5y agoAd revenue up 23% YoY
- deleted 5y ago[deleted]
- lifeplusplus 5y agoAlso companies realizing ads don't work
- drexlspivey 5y agoGoogle and FB being valued in the trillions is a pretty good indicator that ads do work
- nickysielicki 5y agoNo, it’s simply an indicator that companies have spent money on ads.
- ckdarby 5y agoThere is a fair bit of my search that has moved to search which I don't think there is any advertising dollars in at the moment.
- Firebrand 5y ago
- kingcharles 5y agoEasy, tiger. I actually think TikTok, for me at least, is the most enjoyable social network. I don't see any of the things that cause you such angst simply because their algorithm has learnt exactly what I want to see.
- ckdarby 5y agoYes, for mindless short dopamine clips with large diversity of topics it is great.
- filoleg 5y ago> your children are turned into a mindless vassals—who now, watch some teenager dancing, instead of watching YouTube videos about Thomas Jefferson, or Nikola Tesla, or even Magellan; I mean, kids, Magellan is a lot cooler than Justin Bieber! Not sure what kind of a reality you live in or whether this is a satirical comment, but pretty sure that before TikTok existed, kids were not en-masse spending their time on YouTube watching educational videos about Thomas Jefferson or Magellan. Also, kind of weird to bring up Justin Bieber, given his peak popularity among children happened over half a decade ago. TikTok has nothing to do with his popularity.
- samhw 5y ago>> instead of watching YouTube videos about Thomas Jefferson, or Nikola Tesla, or even Magellan > Not sure what kind of a reality you live in This sounds like a neckbeard fantasy of what an 'intellectual' childhood is like. In reality, I doubt any child has been raised that way since John Stuart Mill, and he was suicidal by 20. Fwiw, I went to a school whose students, well- if anyone in the world were raised as described by that commenter, those would be the people. I can say without a doubt that the kids whose parents were even approaching that kind of attitude are the ones who grew up more depressed, and no more accomplished. (My underlying point is that, needless hopefully to say, no one has ever grown up without idle entertainment. Well, short of cavemen, maybe. This whole "take previous generations'/societies' high culture and assume it's what everyone did day in day out" is one of the most irritating of the neckbeard tropes, in a strong field of competitors.)