Alphabet
Another longer-term challenge for all of the major online platforms, including Google, is that TikTok keeps taking greater market share and has a commanding lead among those under 25. This was most evident with YouTube falling short of growth expectations as that has been one of the units driving the company's growth in recent quarters.
Google had been an outperformer relative to the market and other mega-cap tech stocks due to its greater cyclical exposure to the economy. Currently, the stock is down 25% from it's all-time high, following its last earnings report.
Inside the Numbers
In Q1, Alphabet reported earnings per share of $24.62 per share, which was less than expectations of $25.91 per share. Revenue also just missed at $68.0 billion vs. $68.1 billion. Compared to last year, EPS was down 8% and revenue was up 25%.
Google had also benefited from the pick-up in consumer spending and travel over the past year as ad spending in these categories increased, but it wasn't enough to offset weakness in other categories and the impact from Russia.
YouTube revenue was $6.9 billion, while analysts were looking for $7.5 billion. There was less viewership than expected which the company attributed to tough comps from when people were at home. Its TikTok competitor, Shorts, reached 30 billion daily views, double the previous quarter.
Google Cloud revenue came in at $5.8 billion, beating estimates and a 44% increase from last year. There was a negative impact from shuttering Russian operations as growth in its European, Middle East, and Africa segment dropped to 19% from 33% last year.
For a while, its Other Bets division has disappointed in that nothing meaningful has emerged that would move the needle compared to Search. There's some reason for optimism as its revenue doubled from last year to $440 million, although it continues to run at a loss of more than $1 billion. Other Bets include Waymo, its autonomous driving unit.
