Alphabet today announced financial results for the quarter ended March 31, 2018. The company took in $31.15 billion over the three-month period ending March 31st, which is a 26% increase of Q1 of 2017. After expenses, Google had $9.4 billion in net income for Q1.
The company’s net income for the quarter was $9.4 billion, compared to $5.43 billion last year. This translates to adjusted earnings of $13.33 per share, compared to $7.71 for Q1 of 2017.
Analysts had expected revenue of $30.31 billion, and earnings of $9.31 per share. Alphabet’s stock gained $17.55, or 1.64%, in after-hours trading directly following the earnings release, but was subsequently down 0.5% as executives detailed significant investments across hardware and other emerging businesses.
“Our ongoing strong revenue growth reflects our momentum globally, up 26% versus the first quarter of 2017 and 23% on a constant currency basis to $31.1 billion. We have a clear set of exciting opportunities ahead, and our strong growth enables us to invest in them with confidence,” said Ruth Porat, CFO of Alphabet and Google.
Revealed in the earnings is the money Google has been making with Nest. The company’s smart home unit previously operated as a separate company under the Alphabet umbrella, with Google including its revenue and losses in its “other bets” segment that also consists of Google’s internet access business as well as moonshots like self-driving cars and biotech.
However, Alphabet folded Nest back into Google in recent months to more closely align it with its Google Home speakers and other smart home efforts. To account for this change, the company restated all of 2017’s earnings with Nest as part of Google. Based on this information, we now know that Nest generated a total of $726 million in revenue in 2017, while losing some $621 million.
Google CEO Sundar Pichai didn’t say how many devices Nest sold in the past, but revealed that its business is growing. “In 2017, they sold more devices than in the previous two years combined,” he said.
However, we still won’t exactly know how much Nest will make going forward: After previously lumping it into the “other bets” category, the company is now including it in “Google other revenues,” which includes hardware sales, cloud services, and subscriptions — basically anything that doesn’t involve advertising. Altogether, this part of Google’s business now generates about 16% of the company’s revenue, which means that 84% of its revenue still comes from advertising.
Asked about new European privacy rules, Pichai said that the company expected to be ready for the implementation of the GDPR next month.
“We started working on GDPR compliance over 18 months ago,” he said. “It’s really important and we care about getting it right.”
He added that the company was committed to bringing new privacy controls to consumers worldwide.
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