10-QPeriod: Q1 FY2024

Alphabet Inc. Quarterly Report for Q1 Ended Mar 31, 2024

Filed April 26, 2024For Securities:GOOGLGOOGGOOGMGOOGN

Summary

Alphabet Inc. reported strong financial results for the first quarter of 2024, with total revenues reaching $80.5 billion, a 15% increase year-over-year. This growth was primarily driven by a robust performance in Google Services, which saw a 14% increase in revenue, and a significant 28% surge in Google Cloud revenue. The company also demonstrated improved operational efficiency, with operating expenses decreasing by 2% year-over-year, leading to a substantial 46% increase in operating income and a significant expansion in operating margin to 32%. Net income saw a remarkable 57% increase to $23.7 billion, translating to diluted EPS of $1.89, up 62% from the prior year. Reflecting its financial strength and commitment to shareholder returns, Alphabet announced the initiation of a cash dividend program, declaring a $0.20 per share dividend payable in June 2024. The company also continued its aggressive share repurchase program, buying back $16.1 billion of its stock in the quarter and authorizing an additional $70 billion. Furthermore, Alphabet is making significant investments in its technical infrastructure, with capital expenditures of $12.0 billion in the quarter, signaling a strategic focus on supporting long-term growth initiatives, particularly in AI.

Financial Highlights

52 data points
Beta

Revenue

$80.54B

58.1% Gross Margin

Net Income

$23.66B

29.4% Net Margin

EPS (Diluted)

$1.89

Total Assets

$407.35B

Cash & Equivalents

$24.49B

Free Cash Flow

$16.84B

Financial Statements
Beta
Revenue$80.54B
Cost of Revenue$33.71B
Gross Profit$46.83B
R&D Expenses$11.90B
Operating Expenses$55.07B
Operating Income$25.47B
Interest Expense$94.00M
Net Income$23.66B
EPS (Basic)$1.91
EPS (Diluted)$1.89
Shares Outstanding (Basic)12.41B
Shares Outstanding (Diluted)12.53B

Key Highlights

  • 1Total revenues grew 15% year-over-year to $80.5 billion, driven by strong performance in Google Services and Google Cloud.
  • 2Google Services revenue increased 14% to $70.4 billion, with Google advertising up 13% and subscriptions, platforms, and devices up 16%.
  • 3Google Cloud revenue surged 28% year-over-year to $9.6 billion, indicating continued strong adoption.
  • 4Operating income increased 46% to $25.5 billion, and operating margin expanded to 32% from 25% in the prior year, highlighting improved operational efficiency.
  • 5Net income rose 57% to $23.7 billion, with diluted EPS up 62% to $1.89.
  • 6The company initiated a quarterly cash dividend program, declaring a $0.20 per share dividend, and continued significant share repurchases ($16.1 billion in Q1 2024), with an additional $70 billion authorized.
  • 7Capital expenditures increased to $12.0 billion, reflecting ongoing investments in technical infrastructure to support growth and AI initiatives.

Frequently Asked Questions

Alphabet's revenue growth was primarily driven by a 14% increase in Google Services revenue, fueled by strong performance in Google advertising (up 13%) and a 16% rise in subscriptions, platforms, and devices. Additionally, Google Cloud demonstrated substantial growth, with revenue increasing by 28% year-over-year.

Alphabet's profitability significantly improved. Operating income surged by 46% to $25.5 billion, leading to an expanded operating margin of 32%, up from 25% in the same period last year. Net income saw a substantial 57% increase, reaching $23.7 billion, and diluted EPS grew by 62% to $1.89.

Alphabet is actively returning capital to shareholders through a combination of share repurchases and a newly initiated cash dividend program. The company repurchased $16.1 billion of its stock in the first quarter and has authorized an additional $70 billion for future repurchases. Furthermore, it declared its first quarterly cash dividend of $0.20 per share, signaling a commitment to consistent shareholder returns. Significant capital expenditures of $12.0 billion were also made, primarily for technical infrastructure, underscoring continued investment in future growth, particularly in AI.

Alphabet continues to be involved in various antitrust matters in the U.S. and Europe, some of which have resulted in substantial fines, though many are currently under appeal. Additionally, the company faces ongoing investigations and litigation related to privacy, patent, and other legal matters. While Alphabet believes it has strong arguments and will defend itself vigorously, the outcomes are inherently unpredictable and could potentially have a material adverse effect on the company's results of operations or cash flows.