Google posts strong revenues, but Alphabet continues to lose money with its “Other Bets.”
In its earnings results for Q1 2017, Google’s parent company Alphabet announced that it netted $22.8 billion in revenue, an increase of 22% from the same period a year ago. Net profit at $5.42 billion was 29% more than Q1 2016.
Unsurprisingly, Google contributed to a vast majority of the earnings. Overall revenue from Google came in at $24.5 billion, a YoY increase of 22%. The revenue includes money from advertising — including search, display, and YouTube ads. Mobile ads continue to lead the way for ad revenue, and although Google’s cost per click fell by 19%, paid clicks were up 44% from Q1 2016.
Revenues from Google’s non-advertising businesses — which include Pixel sales, Google Play, and the company’s cloud platform — rose 49% to $3.1 billion.
Alphabet is continuing to lose money on its Other Bets, which posted a loss of $855 million. Revenue, however, increased 48% to $255 million from the same period a year ago. With the business unit focusing on long-term bets and moonshots, Alphabet isn’t necessarily worried about losing money in the interim. From CFO Ruth Porat:
Our excellent results represent a terrific start to 2017, with revenues up 22% versus the first quarter of 2016 and 24% on a constant currency basis. We clearly continue to benefit from our ongoing investments in product innovation and have great momentum in our new businesses across Alphabet.