- Alphabet revenue for the quarter came in at $109.9 billion, beating the $106.8 billion expectation reported by Yahoo Finance. Diluted earnings per share were also up compared to Yahoo Finance estimates, coming in at $2.81 rather than the predicted $2.62 per share.
- YouTube’s ad revenue increased by 11% during the quarter, coming in at $9.88 billion.
- In the living room, U.S. viewers are now watching 200 million hours of YouTube content daily. As for YouTube Shorts, over 10 million channels are publishing daily shortform content as of March.
Alphabet posted its first quarter earnings on Wednesday after the market closed. Wall Street expected another quarter that would show growth related to AI and cloud services. Over the past year, Alphabet’s stock has risen by more than 114%, largely due to those two divisions. The company has now beaten earnings estimates in the last 10 quarters.
Revenue for the quarter increased by 22% or 19% in constant currency, which accounts for foreign exchange rate fluctuations, to hit $109.9 billion. This is the 11th consecutive quarter where the company has seen double-digit revenue growth. A main driver of that growth was the Google Services division, which increased 16% to hit $89.6 billion. That was led by a 19% lift in revenue from Google search; a 19% increase in Google subscriptions, platforms and devices; and an 11% bump in YouTube ads.
The company now has over 350 million paid subscriptions, led by YouTube and Google One. It was the strongest quarter ever for the company’s consumer AI plans, primarily driven by adoption of the Gemini app. YouTube’s music and premium options saw its largest quarterly increase in the total number of non-trial subscribers both globally and in the U.S. YouTube Premium was fully launched in 23 countries by the end of the first quarter, and Alphabet plans to launch the offering in a dozen new countries in the second quarter of the year.
The Google Cloud division also saw notable growth as revenue increased by 63% to hit $20 billion. That was largely due to an increase in Google Cloud Platform across enterprise AI solutions and enterprise AI infrastructure
Speaking of AI, Alphabet also saw an increase in research in development during the first quarter of the year. Costs related to R&D shot up 25.6% to hit $17 billion, likely related to the company’s continued investment in AI.
Alphabet also increased its capital expenditure guidance range for 2026. Previously, capex was predicted to range from $175 to 185 billion, but on Wednesday the company announced that its new predicted range is $180 to 190 billion. This bump has to do with Alphabet’s acquisition of the data center and energy infrastructure solutions company Intersect.
More to come …