Google ad boom sends profits to new record

Google’s parent Alphabet reported record first-quarter results on Tuesday as the pandemic kept people at home, watching YouTube and clicking on ads served up by the company.

Gross revenue rose to $55.3bn, Alphabet said, up 34 per cent from $41.2bn and easily outstripping expectations of $51.6bn. Net profit rose 162 per cent to $17.9bn, versus a consensus of analysts’ forecasts of $10.5bn, as calculated by Visible Alpha.

“People have turned to Google Search and many online services to stay informed, connected and entertained,” said Sundar Pichai, chief executive.

Revenue from Google’s search business soared 30 per cent to $31.9bn, while YouTube revenue grew 49 per cent to $6bn.

Chief financial officer Ruth Porat said the figures “reflect elevated consumer activity online and broad-based growth in advertiser revenue”. Alphabet shares rose 4 per cent in after-hours trading.

The board authorised a share buyback of up to $50bn, though no timeframe was given.

By region, revenues soared 44 per cent in Asia, 33 per cent in the US, and 25 per cent in Europe, the Middle East and Africa in the first quarter.

The company’s Google Cloud unit — the third-largest cloud services provider after Amazon and Microsoft — added $4.0bn of revenue, up 45.6 per cent.