Alphabet shares surged in after-hours trading following the company’s announcement of strong earnings that surpassed analysts’ expectations, significant growth in its cloud division, and the initiation of its first dividend. The market cap of Alphabet surpassed $2 trillion due to the positive news. The company reported earnings per share of $1.89, higher than the anticipated $1.51, and revenue of $80.54 billion, exceeding the $78.59 billion expected by analysts. Notable numbers from the report included YouTube advertising revenue of $8.09 billion and Google Cloud revenue of $9.57 billion, both surpassing expectations.
Alphabet’s revenue grew by 15% compared to the previous year, marking its fastest growth rate since early 2022. The company’s board approved a cash dividend of 20 cents per share to be paid in June and stated its intention to pay quarterly dividends moving forward. Additionally, Alphabet authorized the repurchase of an extra $70 billion in shares with the aim of benefitting the company and its shareholders. Profit also jumped by 57% to $23.66 billion, or $1.89 per share, from $15.05 billion, or $1.17 per share, in the previous year.
Google’s total ad sales increased to $61.66 billion from $54.55 billion a year earlier, showcasing a resurgence in its core advertising business after a challenging period in 2022 and 2023 due to economic factors. The company’s cloud business also saw a notable increase in operating income, exceeding expectations and indicating substantial profitability after years of investment. Alphabet has been focusing on AI research and infrastructure, incorporating generative AI features into various services to remain competitive and meet the evolving needs of users. CEO Sundar Pichai highlighted the company’s strong position for future AI innovation.
The strong performance in Google’s advertising business and cloud division contributed to the company’s overall positive results. The continued investment in AI technology and global product expansion has positioned Alphabet well for future growth and innovation. The company’s decision to pay dividends and repurchase shares demonstrates its commitment to returning value to shareholders and maximizing long-term shareholder value. Alphabet’s financial strength, evidenced by its cash reserves and impressive revenue growth, bodes well for its future prospects and strategic initiatives. Overall, the latest earnings report reflects Alphabet’s strong performance and strategic focus on innovation and growth.
