The cloud computing subsidiary of Google, Google Cloud, had a record-breaking fiscal quarter that blew past analysts’ projections and sent Google parent firm Alphabet’s stock surging more than 13% in after-hours trade.
In Q1 2024, Google Cloud’s revenue increased by 28% to $9.57 billion, driven by the growing need for generative AI tools that depend on cloud infrastructure, services, and applications. This maintains the division’s upward trajectory, which saw a year-over-year increase of 25.66% in the most recent quarter (Q4 2023) of operations.
From $191 million to $900 million, Google Cloud’s operational income increased by roughly five times. This bit of information, coupled with Alphabet’s first-ever dividend of 20 cents per share and a $70 billion share repurchase program, undoubtedly delighted investors.
In Alphabet’s first fiscal quarter, Google Search and other revenue increased 14.4% to $46.15 billion. Google’s total advertising revenue increased by 13% year over year to $61.6 billion, while YouTube’s revenue increased by 20% year over year to $8.09 billion (a tiny decrease from Q4 2023 revenue of $9.2 billion).
The notable loser was Alphabet’s Other Bets category, which includes its self-driving car unit Waymo. In Q1, revenue increased by 72% to $495 million; however, Other Bets lost $1.02 billion, or roughly the same amount that it did in Q4 2023. (Other Bets usually fail to generate profit.)
Alphabet’s net income increased by 57% to $23.7 billion, while the company’s overall revenue increased by 15% to $80.5 billion. In addition to Google Cloud’s performance, Alphabet’s 5% staff reduction to 180,895 may have played a role in the winning quarter.
During a call with investors, Alphabet CEO Sundar Pichai stated that by the end of 2024, the total yearly run rate of Google and YouTube’s cloud businesses is expected to exceed $100 billion. The divisions’ total income for the previous year was $64.59 billion, of which $33.08 billion came from Google Cloud and $31.51 billion from YouTube.
“Taking a step back, it took Google more than 15 years to reach $100 billion in annual revenue,” Pichai stated. “Our yearly income has increased from $100 billion to over $300 billion within the previous six years. This demonstrates our history of funding and developing rapidly expanding new businesses.”
Olagoke Ajibola is a creative writer and content producer with an eye for details and excellence. He has a demonstrated history of telling stories for TV, Film and Online. Aside from being fascinated by the power of imagination, his other interest are travel, sport, reading and meeting people.
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