4/26/2024: Google Earnings Beat Expectations
Google reports Q1 earnings after market close yesterday. Revenue was $80.54B vs. $78.59B expected. EPS was $1.89 vs. $1.51 expected. YouTube ad revenue was $8.09B vs. $7.72B expected. YouTube ad revenue grew 20.87% YoY in Q1 vs. 15.53% in Q4, 12.46% in Q3, 4.5% in Q2 and -2.6% in Q1 2023. Google Cloud revenue was $9.57B vs. $9.35B expected. Google Cloud revenue grew 28.44% YoY in Q1 vs. 25.66% in Q4, 22.47% in Q3, 28% in Q2 and 28% in Q1 2023. Google Search revenue grew 14.36% YoY in Q1 vs. 12.7% YoY in Q4, 11.35% in Q3, 4.77% in Q2 and 1.87% in Q1. WOW this is a very solid beat. GOOGL 0.00%↑ stock soars 10+% after the report. The company also announced a $0.2 per quarter dividend and authorized $70B of share buyback.
After all the up-and-downs after earnings, GOOGL 0.00%↑ and META 0.00%↑’s YTD gain is roughly the same around 25%. These two companies currently control online advertising and they are doing great as the economy is doing well. They are also getting a lot of growth from Chinese e-commerce sellers. I recently made a purchase through a Facebook ad from a small brand Chinese seller. It’s kinda shady that they don’t charge sales tax and the item I received was not even half close to the product pictures. Basically, I got scammed. But it’s not a super expensive item so I am not gonna fight it but I am not going to make the same mistake again. I did report their ads but I doubt Facebook is gonna do anything about it. If Facebook removes all these scammy advertisers, their revenue probably would take a small hit and their internal incentive system basically prevents employees from taking the right action for the users. (You don’t want to launch some features that result in a revenue or engagement decline.) But again, I am not going to make the same mistake buying from no-name brands and if there are many users like me, this could negatively impact their ad revenue in the long run. Eventually Facebook will have to deal with the issue on ad scams. Eventually could be years or never though.