Alphabet/Google Earnings Jump 15 Percent in Quarter, Thanks to Ads, Not AI

Alphabet announced that it earned a net income of $23.7 billion on revenues of $80.5 billion in the quarter ending March 31. Those figures are gains of 57 percent and 15.4 percent, year-over-year (YOY). The results were well above expectations, and the firm announced its first-ever shareholder dividend. But it had little to say about AI, specifically, despite a recent and major reorg.

“Our results in the first quarter reflect strong performance from Search, YouTube, and Cloud,” Alphabet and Google CEO Sundar Pichai said. “We are well under way with our Gemini era and there’s great momentum across the company. Our leadership in AI research and infrastructure, and our global product footprint, position us well for the next wave of AI innovation.”

As always, advertising was the primary driver, with $61.7 billion in revenues across Google Search, YouTube, and Google Network, up 13 percent YOY. So, about 77 percent of Alphabet’s (and Google’s) revenues came from ads. Google subscriptions, platforms, and devices contributed $8.7 billion in revenues, up 17.9 percent YOY. And Google Cloud delivered $9.6 billion in revenues, up 28.4 percent YOY.

The firm didn’t deliver any specifics about the success it’s seen so far with Gemini, its Copilot and ChatGPT competitor. In a post-earnings conference call, CFO Ruth Porat only noted that Google spent $12 billion on capital expenditures building out its AI infrastructure in the quarter, a massive increase of 91 percent YOY. It also spent $11.9 billion on AI and other research and development in the quarter, up 4 percent.