Google parent company Alphabet (NASDAQ: GOOG, GOOGL) today reported unaudited financial results for the first quarter of fiscal year 2023, which ended March 31. Alphabet’s revenue for the first quarter was US$69.787 billion, up 3% from US$68.01 billion a year earlier and up 6% on a constant currency basis, while net income was US$15.051 billion, down 8% from US$16.436 billion a year earlier.
Alphabet announced a $70 billion share buyback and first-quarter revenue beat expectations, pushing shares up more than 4% in after-hours trading.
Share price performance:
Alphabet shares rose 4.11% after-hours
Alphabet Class A shares (GOOGL) opened at $105.82 on the Nasdaq exchange on Tuesday. By the end of Tuesday’s trading session, Alphabet shares were down $2.12, or 2.00%, to close at $103.85. As of 17:22 EST Tuesday (5:22 GMT Wednesday), Alphabet shares were up $4.27, or 4.11 per cent, to $108.12. Over the past 52 weeks, Alphabet shares have traded as high as $122.85 and as low as $83.34.
First quarter results highlights:
— Revenues of $69,787 million, up 3 per cent from $68,011 million a year earlier and up 6 per cent year-over-year on a constant currency basis;
・Total advertising revenue was $54,548 million, essentially unchanged from $54,661 million in the prior-year period;
・Google Cloud revenue was $7,454 million, up 28% from $5,821 million in the prior year period
・Other Bets revenue of $288 million, down 35% from $440 million in the prior year period
— Traffic Acquisition Costs (TAC) of $11,721 million, down 2% from $11,990 million in the same period last year
— operating profit of US$17,415 million, down 13% from US$20,094 million in the same period last year; operating margin of 25%, down 5 percentage points from 30% in the same period last year
— net profit of US$15,051 million, down 8 per cent from US$16,436 million in the same period last year
— diluted earnings per share of US$1.17, down 5% from US$1.23 a year earlier
— Alphabet said that most of the affected employees will not be reflected in the total workforce until the end of the second quarter of the year. The company also said that the majority of affected employees would not be reflected in the total workforce until the end of the second quarter of this year.
Repurchase of $70 billion of stock
Alphabet announced that on April 19, 2023, its Board of Directors authorized the company to repurchase up to an additional $70 billion of Class A and Class C shares in a manner deemed to be in the best interests of the company and its shareholders. The repurchases will take into account economic costs and prevailing market conditions, including the relative trading price and volume of Class A and Class C shares. Alphabet expects the repurchases to be executed from time to time, depending on general business, market conditions and other investment opportunities, through open market purchases or privately negotiated transactions, including through the Rule 10b5-1 program.
Alphabet CEO Sundar Pichai said: “We are pleased with the performance of our business in the first quarter, with good performance in search and strong momentum in the cloud. We launched important product updates, grounded in deep computer science and artificial intelligence. Our Polaris is providing the most helpful answers to our users, and we see great opportunities ahead to continue our long track record of innovation.”