Alphabet Q1 2018 earnings: $31 billion revenue leads to $7 billion income

First quarter sees strong double-digit growth overall, with advertising driving a bulk of the business.

Alphabet, the parent company comprised of Google and various other subsidiaries, has just released its Q1 2018 earnings. The top-level numbers are strong: $31.1 billion in revenue, leading to $7 billion in operating income for the three months. Those numbers are increases of 26% and 22% over the previous year, respectively, and earnings per share were $13.53. In short, Alphabet continues to have amazingly large growth for a company of its size.

The "Google" part of the business obviously continues to be the primary driver of revenue and income for the company, with the "Other bets" segment — a combination of small, speculative endeavors — delivering a relatively tiny amount of revenue and another quarterly loss. Other bets had revenues of just $150 million, leading to a $571 million loss — though that was an improvement of $132 million from last year. Google's "other revenues," which includes segments like its hardware business and the Play Store, had $4.35 billion in revenue, up over $1 billion from Q1 2017.

Advertising, primarily from Google's properties, is the most substantial portion of Alphabet's earnings, making up $26.6 billion of the revenue. Traffic acquisition costs (TAC, what Google pays to gain traffic to ads) went up once again, by 2 percentage points, up to 24% of advertising revenues. Paid clicks were up by 59%, and the cost-per-click was down 7% from a year earlier. This continues to be the trend for Google (if not the entire online advertising system): paid advertising clicks keep going up, but the cost for each is going down.

Alphabet's cash position hasn't changed much, now standing at $102 billion, and its effective tax rate was 11% — though that number is mostly lower due to a change in accounting standards.

Outside of the money, Alphabet now has over 85,000 employees worldwide, which is a considerable jump of 11,000 from Q1 2017.

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