Alphabet Inc, the parent company of Google, has announced its impressive financial results for the first quarter, with record-breaking profits and plans for a $50 billion share buyback program. The company reported a sales increase of 34% to reach $55.3 billion, surpassing analysts’ expectations. Google’s ad sales saw a significant jump of 32%, and its cloud sales increased by 45.7%. These results indicate the continued success of Google services such as search and YouTube, which gained popularity during the pandemic. However, Alphabet cautioned that the surge in usage and ad sales may slow down as people resume in-person activities.

Alphabet’s quarterly profit reached $17.9 billion, surpassing estimates, and its operating margins reached 30% for the first time since its inception. The company achieved these results despite higher costs due to hiring, legal matters, and new facility construction. It should be noted that $4 billion of earnings came from unrealized gains in venture capital investments and recalculating depreciation of some data center equipment.

To demonstrate confidence in its future, Alphabet’s board authorized a $50 billion share buyback program, following a previous $25 billion program in 2019. Google’s ad business remains dominant, accounting for 81% of Alphabet’s first-quarter revenue. Google Cloud also showed improvement, narrowing its operating loss to $974 million.

Despite ongoing privacy and antitrust lawsuits, Alphabet’s sales have not been significantly affected. However, potential changes to U.S. and European laws that would impose stricter oversight on Google and other tech giants have been delayed due to the pandemic. Additionally, there are concerns over Google’s long-term prospects and allegations of anticompetitive behavior, with Roku Inc accusing Google of favoring its YouTube and hardware businesses. Google-owned YouTube has dismissed these claims as baseless.

Overall, Alphabet’s strong performance in the first quarter positions the company well for continued success. However, the impact of post-pandemic consumer behavior and ongoing legal challenges must be monitored closely.

Useful links:
1. Alphabet Inc
2. Alphabet Inc Q1 Results