Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) announced its Q1 earnings on Tuesday, reporting a 3% YoY gain in revenue, which beat Wall Street expectations by $1 billion. The company's net income for the quarter was $17.93 billion, compared to $6.84 billion for the same period last year. Diluted earnings per share came in at $1.17, higher than the consensus estimate of $1.07. However, the figure was affected by a higher-than-expected charge of $2.6 billion for workforce and office space cuts. Alphabet CEO Sundar Pichai said that the company was "pleased with our business performance in the first quarter, with Search performing well and momentum in Cloud."
Alphabet's revenue by segment included Google search and other advertising, which generated $40.36 billion (up 1.9%); YouTube ads, which generated $6.69 billion (down 2.6%); Google Network ads, which generated $7.5 billion (down 8.3%); Google Cloud, which generated $7.45 billion (up 28.1%); and Other Bets, which generated $288 million (down 34.5%). The company's headcount rose more than 16% year-over-year to 190,711 employees, which included almost all of the employees affected by plans to cut 12,000 jobs. However, Alphabet expects that most of those affected will no longer be reflected in its headcount by the end of the second quarter of 2023.
Despite the job cuts, Alphabet's board authorized the company to repurchase up to an additional $70 billion worth of shares from time to time, which boosted investor confidence. After the earnings call, Alphabet stock rose 3.9% for Class A shares and 4% for Class C shares. Overall, the strong earnings report and buyback authorization suggest that Alphabet remains committed to delivering long-term growth and investing in its most compelling growth areas, including re-engineering its cost base.
