Alphabet reports Q1 revenue up 3% YoY to $69.8B, net income down 8% YoY to $15.1B, Other Bets revenue down 35% YoY to $288M, and Other Bets loss up 47% YoY

MOUNTAIN VIEW, Calif. - April 25, 2023 - Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced financial results for the quarter ended March 31, 2023.

Alphabet 2023-04-26

Context & Ripple Effects

Alphabet’s Q1 report combines modest top-line growth with an 8% decline in net income, a less favorable earnings mix than the company’s earlier 14% revenue growth in Q3 2020.

The Other Bets portfolio remains a recurring drag: its revenue fell while losses widened, extending the pattern of rising Other Bets operating losses reported in 2020. Later coverage shows Alphabet’s revenue and earnings growth reaccelerated, while Other Bets revenue continued to fluctuate.

First-order effects

Alphabet enters the quarter with $69.8B in revenue but lower net income, reducing the earnings contribution generated from each dollar of reported sales.
Other Bets generated just $288M of revenue after a 35% decline, while its loss rose 47%, worsening the portfolio’s immediate financial burden.

Second-order effects

The widening gap between Other Bets revenue and losses increases pressure on Alphabet to justify continued investment in ventures that are not yet producing durable revenue.
Investors and management are likely to focus more closely on core-business profitability and on whether experimental businesses can improve their revenue trajectory.

Third-order effects

If this pattern persists, Alphabet’s holding-company model may become more explicitly bifurcated: a profit-generating core supporting a smaller, more tightly scrutinized venture portfolio.
The later recovery in companywide growth alongside continued Other Bets revenue volatility suggests that diversification alone does not make adjacent ventures a dependable earnings counterweight.

The trend: Large platform companies are increasingly judged on whether long-horizon bets can show a credible path from strategic experimentation to measurable revenue and loss discipline.

Discussion

@sundarpichai Sundar Pichai on x
Looking forward to our Q1 earnings call soon! https://abc.xyz/... https://twitter.com/...
@modestproposal1 @modestproposal1 on x
“Yeah, we just moved some expenses around and now Cloud is profitable. Should've thought of that before.” https://twitter.com/...
@isforat Brian Hall on x
“Google's cloud business turns profitable”. Big congratulations to everyone who helped get us here! Looks like Google Cloud is also the fastest growing cloud again, which is pretty exciting too. What a fun market and opportunity. https://www.cnbc.com/...
@eric_seufert Eric Seufert on x
Alphabet just published Q1 2023 results: Overall advertising revenue was down -0.21% Y/Y, but Search returned to growth at 1.87%. YouTube was down -2.56%; Network was down -8.29%. https://twitter.com/...
@epro Emil Protalinski on x
$GOOG Q1 2023 Revenue up 3% to $69.8 billion Net income down 8% to $15.1 billion Google Cloud up 28% YouTube down 3% Other Bets down 35% Other Bets loss up 47% Traffic Acquisitions Costs down 2% Employees up 16% to 190,711
@_snoopytech_ @_snoopytech_ on x
Are they using the Pixel Tablet here? https://twitter.com/...
@rustybrick Barry Schwartz on x
Google ad specific revenue flat YoY but down 7.6% QoQ https://twitter.com/...
@munster_gene Gene Munster on x
Comparing tonights $GOOG and $MSFT earnings calls. When the topic of AI has come up, it feels like Google management is drinking tea and Microsoft Red Bull. GOOG stock is up 1%, MSFT up 9% in after-hours.
@buccocapital BuccoCapital Guy on x
“As you can clearly see from this picture of a board room, I am a wartime CEO” https://twitter.com/...
@munster_gene Gene Munster on x
Google's AI tone is optimistic, measured, put the customer first, do it right, and light on details besides AI search. Microsoft is talking up about how much they're integrating AI into many products in the near term, try it out and see if it works.
@nicoagrant Nico Grant on x
Alphabet's earnings results today highlighted Google's enviable advantage as a gateway to the web for billions of people around the world, a position that cannot be dislodged quickly or easily. https://www.nytimes.com/...
@modestproposal1 @modestproposal1 on x
“We're going to get some questions about how our headcount grew 500 people despite [quote unquote] layoffs. Try not to laugh like you are now” https://twitter.com/...
@thestalwart Joe Weisenthal on x
Wow! I had not realized that for $GOOGL, cloud has never been profitable until now. https://www.bloomberg.com/... chart via @daveyalba https://twitter.com/...
@matthewstoller Matt Stoller on x
I'm so old I remember when people claimed Google lost its search ad monopoly due to AI. https://www.bloomberg.com/...
@zackkanter Zack Kanter on x
I will never understand how the financial press allows GCP and Azure to get away with counting Workspace/Office in ‘cloud’ revenue. https://www.cnbc.com/... https://twitter.com/...
@dez_blanchfield Dez Blanchfield on x
After many years now, Google's cloud business finally manages to turn profitable, for the first time on record.. will they be able to continue to do so, only time will tell.. they have some massive competition from old players and new entrants.. https://www.cnbc.com/...
@rihardjarc Rihard Jarc on x
$GOOGL cloud actually making a $191M profit in the Q vs an expected loss of -$563M is a big thing. Before so many analyst and investors saying Gcloud won't be profitable etc. The valuation might start to price in a growing & profitable cloud business in the next days/weeks...
@mattschaar Matt Schaar on x
I wish we could have a real, honest, frank conversation about the fact that tech workers are truly *workers*, with far less proportionate power than executives, who are severely affected by executive decisions. Case in point: https://www.cnbc.com/...
@alphabetworkers @alphabetworkers on x
$70 Billion on stock buybacks. Millions more in executive pay. 12,000 workers laid off. We're organizing to change this math because it's not adding up for workers. https://www.cnbc.com/....
@jackmonero JacksonMonero on x
Nice... Buybacks While Laying Folks Off. 🤡🌎 https://www.cnbc.com/...

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