Alphabet delivers strong set of quarterly financial results, despite advertising decline in March as global Coronavirus pandemic starts to bite
Google parent Alphabet has posted its first quarter financial results that offer an insight to the financial impact of the Coronavirus pandemic on the technology sector.
The results showed that Google posted its weakest revenue growth in nearly five years in the first quarter, mostly down to the decline in advertising sales during the pandemic.
In February this year Alphabet had posted a strong set of fourth quarter and year-end financials, but despite that strong growth, the figures for its YouTube and Cloud divisions had disappointed investors in Wall Street and shares in the firm fell as a result.
But on Tuesday Alphabet revealed that for its first quarter it had again provided another solid set of financial results.
For the period ending 31 March, Alphabet posted a modest increase in profit to $6.8bn from $6.6bn in the same year ago quarter.
Revenues meanwhile rose to $41.1bn from $36.3bn in the first quarter of 2019.
“Given the depth of the challenges so many are facing, it’s a huge privilege to be able to help at this time,”said Sundar Pichai, CEO of both Alphabet and Google. “People are relying on Google’s services more than ever and we’ve marshalled our resources and product development in this urgent moment.”
There was revenue growth across all of Alphabet’s divisions, including search, advertising, YouTube, and cloud. The only decline was in its “other bets” division.
But it was up to the chief bean counter at Google to reveal the impact that Covid-19 is having on the tech giant.
“Our business, led by Search, YouTube, and Cloud, drove Alphabet revenues to $41.2 billion, up 13 percent versus last year, or 15 percent on a constant currency basis,” said Ruth Porat, CFO of Alphabet and Google.
“Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues,” she said. “We are sharpening our focus on executing more efficiently, while continuing to invest in our long-term opportunities.”
Porat also warned of the pain ahead, saying that the company is anticipating that the next quarter will be “a difficult one”.
Alphabet will slow some of its hiring and “moderate the overall pace of investment”, Porat said.
Alphabet currently has 123,048 employees.
Google and Apple are currently developing their joint coronavirus contact-tracing technology to help in the global fight against the pandemic.