Update (April 26, 6:00 pm ET): Article has been updated with additional information following Alphabet's earnings call.
What you need to know
- Alphabet announced first-quarter earnings for 2022.
- The company brought in more than $68 billion in revenue which fell below analyst expectations.
- Sundar Pichai teased new YouTube features and upcoming hardware announcements at Google I/O.
Google's parent company, Alphabet, has announced its first-quarter earnings for 2022. The company managed to make more than $68.01 billion in revenue, down from $75 billion in the previous quarter but up 25% year-over-year. This is also slightly below the $68.11 billion Google was projected to hit.
The biggest driver, of course, was Google's ad business, with Search bringing in nearly $40 billion in revenue. Google Cloud also increased its revenue year-over-year as the company focuses on scaling its business, although it still operates at a loss, albeit slightly a narrower one.
"Q1 saw strong growth in Search and Cloud, in particular, which are both helping people and businesses as the digital transformation continues," said Alphabet CEO Sundar Pichai in a statement. "We’ll keep investing in great products and services, and creating opportunities for partners and local communities around the world."
YouTube ads accounted for nearly $7 billion in revenue, falling short of analyst expectations of $7.5 billion (via CNBC), likely due to competing streaming apps like TikTok growing in popularity.
During the earnings call, Pichai notes how YouTube Shorts, the company's TikTok competitor, accumulates 30 million daily views while viewers consume more than 700 million hours of YouTube content every day. Alphabet also highlights its investments and monetization efforts for YouTube Shorts, including the $100 million YouTube Shorts fund, which it believes will help maintain growth of the platform.
The company also teased new YouTube features for smart TVs, allowing viewers to "use your smartphone to control navigation, and interactivity features allowing people to come and share content they are watching on television directly from their devices."
The company does not typically announce Pixel sales, lumping its best Android phones into the "other" category along with other hardware, apps, and subscriptions. Revenue in this category did not quite reach that of the previous quarter when Google boasted "record Pixel sales" following the launch of the Pixel 6 series, and also missed the expected $7.3 billion mark. However, Pichai maintained that the Pixel 6 is the "fastest-selling Pixel ever" while teasing upcoming hardware announcements at Google I/O 2022, saying he's "excited for the products we have coming."
We expect Google to talk more about what to expect with Android 13, but we also anticipate announcements of devices like the much-anticipated Pixel Watch running Wear OS 3 and the potential launch of a mid-range Pixel 6a. Google I/O will commence on May 11, where we can expect to hear more about Google's hardware efforts, which will hopefully include the rumored Nest display.
