The parent of Google and YouTube reported slowing revenue and profit growth again in the first quarter, Alphabet said Tuesday, including the third straight quarterly decline in YouTube’s ad sales.
Alphabet reported revenue of $69.8 billion, up 3% from last year’s $68 billion, a slower growth rate than the Mountain View, Calif.-based company is accustomed to.
Net income of $15.1 billion, or $1.17 per diluted share, compared with $16.05 billion or $1.23 per share a year ago, beat predictions. Zacks had analysts forecasting earnings per share of $1.06.
“We see huge opportunities ahead, continuing our long track record of innovation,” Alphabet CEO Sundar Pichai said in a statement accompanying the earnings. The company’s board of directors also authorized a $70 billion share buyback, which appears to have spurred a 4% rise in Alphabet shares in after-hours trading.
YouTube saw revenue drop 3% yer over year to $6.7 billion, amid a broader industry spending slowdown. This marks the third quarter in a row that YouTube has pulled in less cash, after growing steadily since 2019.
Conspicuously, the company did not provide an update on YouTube’s subscription business, which it touted in a February announcement of the company’s fourth-quarter earnings for 2022, except for a brief remark by Pichai about YouTube TV’s “great momentum.”
“The living room remained our fastest-growing screen,” Pichai also said in discussing YouTube’s performance. Philipp Schindler, Alphabet’s chief business officer, mentioned “a longer-term effort to make YouTube more shoppable,” suggesting it would seek revenue through ecommerce connected to videos on the service.
Longtime Google executive Neal Mohan replaced another company veteran, Susan Wojcicki, as YouTube CEO this year.
The results came as tech and media companies, including Alphabet, have laid off thousands as the economy has slowed. Tech companies that went on a hiring spree during the pandemic in particular have felt the pain: Alphabet cut 12,000 jobs in the first quarter, bringing its headcount down from the 190,234 employees it reported at the end of 2022.
The layoffs and reductions in office space led to charges of $2.6 billion during the quarter, above the range of $1.9 billion to $2.3 billion the company had forecast.