10-QPeriod: Q1 FY2019

Alphabet Inc. Quarterly Report for Q1 Ended Mar 31, 2019

Filed April 30, 2019For Securities:GOOGLGOOGGOOGMGOOGN

Summary

Alphabet Inc. reported strong first-quarter 2019 results, with total revenues reaching $36.3 billion, a 17% increase year-over-year. This growth was primarily driven by the Google segment, which saw a 17% increase in revenue to $36.2 billion, with notable contributions from Google properties and Google other revenues. The company's operational efficiency is highlighted by its income from operations of $6.6 billion, despite facing a significant European Commission fine of $1.7 billion in the quarter. Alphabet maintained a robust liquidity position with $113.5 billion in cash, cash equivalents, and marketable securities, supporting continued investment in research and development and significant capital expenditures. Key financial highlights include a healthy operating cash flow of $12.0 billion and strategic capital expenditures of $4.6 billion, signaling ongoing investment in infrastructure and future growth. The company also continued its capital return program, repurchasing $3.0 billion of its Class C capital stock. Diluted earnings per share stood at $9.50, reflecting the company's profitability. The company's financial performance demonstrates resilience and continued expansion across its core advertising business and growing cloud and hardware offerings.

Financial Highlights

49 data points
Beta

Revenue

$36.34B

55.9% Gross Margin

Net Income

$6.66B

18.3% Net Margin

EPS (Diluted)

$0.47

Total Assets

$245.35B

Cash & Equivalents

$19.15B

Free Cash Flow

$7.36B

Financial Statements
Beta
Revenue$36.34B
Cost of Revenue$16.01B
Gross Profit$20.33B
R&D Expenses$6.03B
Operating Expenses$29.73B
Operating Income$6.61B
Interest Expense$35.00M
Net Income$6.66B
EPS (Basic)$0.48
EPS (Diluted)$0.47

Key Highlights

  • 1Total revenues increased by 17% year-over-year to $36.3 billion in Q1 2019.
  • 2Google segment revenues grew by 17% to $36.2 billion, driven by Google properties and Google other revenues.
  • 3Income from operations was $6.6 billion, while the company incurred a $1.7 billion European Commission fine.
  • 4Operating cash flow remained strong at $12.0 billion.
  • 5Total capital expenditures amounted to $4.6 billion, indicating continued investment.
  • 6The company repurchased $3.0 billion of its Class C capital stock during the quarter.
  • 7Diluted earnings per share were $9.50.

Frequently Asked Questions

Alphabet's total revenues grew by 17% year-over-year to $36.3 billion in the first quarter of 2019. The Google segment, which is the company's main revenue driver, also grew by 17% to $36.2 billion.

The European Commission imposed a fine of €1.5 billion ($1.7 billion) in March 2019 related to AdSense for Search agreements. This fine was recognized as an expense in the first quarter of 2019, impacting the 'European Commission fine' line item under costs and expenses, and contributing to a higher effective tax rate for the quarter due to its non-deductible nature.

Alphabet maintained a strong liquidity position with $113.5 billion in cash, cash equivalents, and marketable securities as of March 31, 2019. This robust financial standing provides flexibility for investments, operations, and capital returns.

Alphabet continues to return capital to shareholders through its share repurchase program. In the first quarter of 2019, the company repurchased and retired 2.7 million shares of Class C capital stock for a total of $3.0 billion. The company also has $11.2 billion remaining under its authorized repurchase program.