Google’s parent company has revealed a 13% surge in first quarter revenue despite a “significant” hit to advertising sales as the coronavirus crisis gathered pace.
Alphabet – the first of the five big US tech firms to report on their progress during the pandemic – recorded revenue of $41.2bn between January and March.
Shares – 8% down in the year to date amid the stock market chaos since March – rose more than 3% in after-hours dealing on Wall Street when Alphabet’s figures dropped.
Analysts suggested the revenue figure had settled some nerves over an uncertain picture for the big five – also including Amazon, Microsoft, Apple and Facebook – as companies and consumers alike cut back on their spending in reaction to the COVID-19 crisis.
Lockdown conditions across key markets in Europe and North America meant there was little incentive to advertise in areas such as travel and leisure.
The 13% revenue growth figure represented the weakest rise in first quarter sales for five years.
Google ad sales were $33.8bn – a rise of 10% on the same period last year.
Advertising, mainly via Google, remains the most important constituent of Alphabet’s earnings as it accounts for around 80% of revenue on an annual basis.
Chief financial officer Ruth Porat told investors: “Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues.”
The cloud business generated $2.8bn in revenue, up 52%, while YouTube ad sales topped $4bn – a third up on a year ago.
The company, which does not give guidance on its future earnings’ expectations, has already implemented a series of cost-cutting measures including slowing down the pace of hiring and marketing.
Alphabet’s total costs and expenses rose about 12% in the first quarter from a year ago – topping $33bn.
Ms Porat added: “We are sharpening our focus on executing more efficiently, while continuing to invest in our long-term opportunities.”