Google reported a 23% year-over-year increase in revenue for its first-quarter 2022 financial results, with total revenue exceeding $68 billion.
That’s significantly higher than the $55.3 billion reported in the first quarter of 2021, but a marked drop from the 34% growth rate reported at the time, when consumers’ information needs were at their peak due to the pandemic.
Just before the quarterly earnings call, parent company Alphabet issued a media release citing “strong growth in search and cloud” as the key drivers.
Alphabet and Google CFO Ruth Porat noted in the release that Google continues to make “thoughtful investments in capital spending, R&D and talent to support long-term value creation for all stakeholders.”
YouTube revenue growth is not enough
YouTube brought in $6.87 billion, which, as Bloomberg’s Mark Bergen pointed out, missed analysts’ expectations by more than $500 million.
YouTube’s ad revenue grew just 14.4% last quarter, missing analysts’ estimates by more than $500 million.
Could be Apple’s ad crackdown, TikTok competition, or _____
– Mark Bergen (@mhbergen) April 26, 2022
Porat reports that YouTube’s decline in revenue growth can be attributed to “the superior performance of their direct response to their call for the first quarter of 2021.”
Even so, Alphabet and Google CEO Sundar Pichai said YouTube now has more than 2 billion monthly logged-in users.
He also confirmed that time spent on YouTube continues to grow even as people have returned to live events.
YouTube Shorts, a major growth driver, now gets more than 30 billion views a day, four times what it was a year ago, Pichai said.
However, while Shorts views count towards a channel’s total watch time, they Don’t help creators Eligible to monetize through the YouTube Partner Program (YPP).
Over time, Pichai promises, monetization is a focus of YouTube’s continued efforts.
YouTube is also currently testing the App Install and Video Action ad formats, according to Chief Commercial Officer Phillipp Schindler.
Google invests in US, London, Warsaw and Nairobi
To help support its own flexible work plans, Pichai announced that Google plans to invest $9.9 million in U.S. data centers and offices this year, creating 12,000 new Google jobs.
New office investment will also come to London and Warsaw, as well as a new product development facility in Nairobi.
Cloud, AI, YouTube and search have been priorities over the past year, with Google spending more than $40 billion on research and development in the U.S. alone by 2021.
More key highlights
Google reports:
- $18.3 billion, an increase of 24%, with the largest increase in headcount.
- Operating income was $20.2 billion.
- Free cash flow for the trailing 12 months was $69 billion.
- Repurchased $52 billion of Class A and Class C shares over the past 12 months.
- Significant growth in YouTube subscription revenue was offset by Play performance.
Google’s search and ad revenue rose $39.6 billion, or 24%, largely due to a continued recovery in retail and travel, Porat said.
Featured Image: Shutterstock/Jane0606
source:
Webcast of Alphabet’s Q1 2022 Earnings Conference CallYouTube
Alphabet reports first-quarter 2022 resultsAlphabet Investor Relations
