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Alphabet Q1 2016 income sees boost from ad revenue

Google’s parent company Alphabet has seen its revenue jump from $17.3 billion to $20.3 billion in Q1 2016, following a boost to advertising income.
By
April 22, 2016
alphabet

Alphabet, the relatively new parent company for Google and its other ventures, has just announced its first quarter earnings results for 2016. The results are rather positive, with revenue leaping up from $17.3 billion in Q1 2015 to $20.3 billion in Q1 2016. Net income for the quarter reached $4.2 billion, up from $3.5 billion a year before. Back in Q4 2015, Alphabet reported strong earnings of $21.3 billion billion in revenue and $3.97 billion in net income.

Despite the notable year-over-year boost to income, Alphabet missed analyst expectations, resulting in a more than 4 percent fall in the company’s share price. This decline is likely a result of increasing costs in some parts of the company, as operating expenses leapt up from $6.5 to $7.3 billion and losses from the company’s moonshots reached $802 million, up from $644 million a year before.

Ruth Porat, chief financial officer at the parent company, told investors that Alphabet was “pursuing big bets and building exciting new technologies,” in order to push through into new markets and set the company up for continued growth in the future. Google CEO Sundar Pichai also stated plans to launch a total of 15-20 original series on YouTube this year to improve the service’s appeal as an alternative to traditional TV.

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Although the company is clearly expanding into new areas, advertising revenue continues to be the big earner for Alphabet. Income increased by 16 percent over the quarter. Total revenue reached $18 billion, up from $15.5 billion, after the number of advertising clicks leapt by 29 percent compared with the previous year. However, the average price of online ads fell by 9 percent over that quarter.

Overall, Alphabet calls the first quarter results a “tremendous start to the year”, as the company has seen a boost to its core earner and has embarked on a number of new ventures. If you’re interested in some more of the ins-and-outs of the earnings results and outlook, you can tune in to the investor call below.