Google parent company Alphabet’s earnings remain strong amid COVID-19 with $41 billion revenue in Q1 2020

The tech giant will likely be hit harder by COVID-19 in the next three months

Alphabet, Google’s parent company, has announced that its Q1 2020 earnings amounted to $41.14 billion USD (roughly $57 billion CAD) and $6.8 billion (about $9.5 billion CAD) in profit. This is a revenue increase of 13 percent from $36.34 billion (about $50 billion CAD) in Q1 2019.

“Given the depth of the challenges so many are facing, it’s a huge privilege to be able to help at this time,” said Sundar Pichai, the chief executive officer at Alphabet and Google, in a recent statement. “People are relying on Google’s services more than ever and we’ve marshalled our resources and product development in this urgent moment.”

These numbers, which consist of earnings from January to March, are an indication of how the early days of the ongoing COVID-19 pandemic have impacted Alphabet’s revenue. While Alphabet seems to be weathering the storm of the global COVID-19 pandemic to an extent so far, the worst is likely still yet to come for the tech giant.

The company’s first two months of the quarter were on pace to surpass expectations but fell significantly in March as the pandemic started to affect more countries around the world, according to Alphabet’s chief financial officer Ruth Porat.

“Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues. We are sharpening our focus on executing more efficiently while continuing to invest in our long-term opportunities,” said Porat during an earnings call on Tuesday.

Breaking down the tech giant’s specific divisions, YouTube experienced a revenue jump up 33 percent to $4 billion (roughly $5.59 billion CAD), while Google’s cloud division saw an increase of more than 55 percent to $2.8 billion (approximately $3.9 billion CAD). Google Meet, the company’s Zoom competitor, now has 3 million new users a day, an increase in 2 million per day during the last quarter. Ad revenue growth, on the other hand, only amounted to $33.7 billion (about $47 billion CAD) for the quarter, a 10 percent year-over-year increase from last year’s 29.48 billion and a significant decrease from the 16 percent growth the company noted for 2019. Play Store purchases amounted to $4.44 billion ($6.2 billion CAD), a 23 percent increase year-over-year.

Earlier this month, Alphabet announced plans to slow its hiring throughout 2020, though the tech giant did bring on 5,000 new employees this past quarter.

Source: Google