The pandemic has finally hit Google as Alphabet’s profit for Q1 dropped by 8 percent due to YouTube ads growth becoming stagnant.
The company posted a US$16.4 billion in net income for the quarter a drop compared to US$17.9 billion the year prior. A drop in income has not happened since 2020 for Alphabet.
However operating income jumped from US$16.4 billion to $20 billion. Total revenue grew to US$68 billion up from US$55.3 billion. This was slightly below analysts’ expectations of US$68.05 billion.
YouTube ads grew 14 percent compared to the year prior, a smaller jump than the company normally reports. Alphabet said due to the ongoing war in Ukraine some European advertisers pulled back its ad spending on the video giant.
Sundar Pichai, CEO of Alphabet and Google said, “Q1 saw strong growth in Search and Cloud, in particular, which are both helping people and businesses as the digital transformation continues. We’ll keep investing in great products and services, and creating opportunities for partners and local communities around the world.”
Ruth Porat, CFO of Alphabet and Google said, “We are pleased with Q1 revenue growth of 23 percent year over year. We continue to make considered investments in Capex, R&D and talent to support long-term value creation for all stakeholders.”
Porat also told investors that the company will face another difficult quarter as the company halts operations in Russia, which according to the New York Times accounts for one percent of its total revenue.
Shares of Alphabet dropped 4 percent during aftermarket trading.
Alphabet ended its last financial result by hitting revenues for the year of $257 billion, the first time it has topped $200 billion.