Alphabet Inc. Q1 FY2024 Earnings Call

· Earnings call transcript and AI-powered summary

Quarter Overview

  • Alphabet delivered a strong Q1 2024 driven by Search, YouTube, and Cloud.
  • Consolidated revenue reached $80.5B, up 15% year-over-year (16% in constant currency).
  • Operating income was $25.5B, up 46%; adjusted operating margin expanded to 33% (from 29% in Q1 2023).
  • Net income was $23.7B with EPS of $1.89.
  • Free cash flow was $16.8B; cash and marketable securities ended at $108B.
  • Alphabet announced a new quarterly dividend of $0.20 per share and a $70B share repurchase authorization.

Business Segment Highlights

Google Services

  • Revenue: $70.4B, up 14% year-over-year.
  • Search & Other Ads: $46.2B, up 14%, again led by strength in retail, particularly APAC retailers (a trend since Q2 2023).
  • YouTube Ads: $8.1B, up 21%—acceleration partially due to lapping weak 2023 Q1 comps.
  • Network Ads: $7.4B, down 1% year-over-year.
  • Subscriptions, Platforms & Devices: $8.7B, up 18%; growth driven by YouTube Premium & Music subscriptions (now 100M+ subscribers).
  • YouTube TV surpassed 8M paid subscribers.
  • TAC (traffic acquisition costs): $12.9B, up 10%.
  • Services operating income: $27.9B with 40% margin (up from 35% in Q1 2023 adjusted).

Google Cloud

  • Revenue: $9.6B, up 28% year-over-year, driven by GCP and Workspace growth.

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Operator: Welcome, everyone. Thank you for standing by for the Alphabet First Quarter 2024 Earnings Conference Call. [Operator Instructions] I would now like to hand the conference over to your speaker today, Jim Friedland, Director of Investor Relations. Please go ahead. James Friedland: Thank you. Good afternoon, everyone, and welcome to Alphabet's First Quarter 2024 Earnings Conference Call. With us today are Sundar Pichai, Philipp Schindler, and Ruth Porat. Now I'll quickly cover the safe harbor. Some of the statements that we make today regarding our business, operations, and financial performance may be considered forward-looking. Such statements are based on current expectations and assumptions that are subject to a number of risks and uncertainties. Actual results could differ materially. Please refer to our Forms 10-K and 10-Q, including the risk factors. We undertake no obligation to update any forward-looking statement. During this call, we will present both GAAP and non-GAAP financial measures. A reconciliation of non-GAAP to GAAP measures is included in today's earnings press release, which is distributed and available to the public through our Investor Relations website located at abc.xyz/investor. Our comments will be on year-over-year comparisons unless we state otherwise. And now I'll turn the call over to Sundar. Sundar Pichai: Thank you, Jim, and hello, everyone. It was a great quarter led by strong performance from Search, YouTube, and Cloud. T

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