Google Q1 2021 Earnings

Numbers

• Revenue: $55.31B (exp $51.61B)

• EPS: $26.29 (exp $15.64)

• Operating Income: $16.44B (exp $12.02B) 

• Net Income - 17.9B

• Approved Buyback Of Additional $50B Class C Stock

• Google has 3 businesses growing at greater than 45% run rate and revenue of 4 bn a quarter

• Alphabet structure is a scam, the goal is to burn some money to lower operating margin to reduce antitrust scrutiny
  

Segment Breakdown

• Google search 31B vs 24.5B in Q1, 2020

• Google Cloud revenue: $4.05 billion vs. $4.07 billion, according to FactSet estimates(2.7B in Q1 2020) up 48%

• YouTube ads: $6.01 billion vs. $5.70 billion, according to StreetAccount (4B in Q1 2020) up 50%

• Traffic Acquisition Costs (TAC): $9.71 billion  vs. $9.25

• Google Network 6.8B

• Google Other(hardware, playstore, non-advertising youtube revenues) 6.4B (4.4B in Q1 2020) up 45%

Operating Income breakdown

• Google Service - 19.5B

• Cloud lost 900M in Q1. Prediction is that in 2021 Cloud will be cash flow positive

• Other bets lost 1.1B

• Google ends the quarter with 135B in cash

Highlights and Opinions from earnings call

• 100M searches for COVID and related health information

• Retail, tech and CPG

• Helping American airlines predict traffic on untapped routes

• Searches for local and businesses are up 80% - accelerated curbside pickup

• Omnichannel fulfillment approach using search and maps

• Job seekers looking for jobs, top employment websites
• What are the key drivers you are thinking of driving search growth ?
• Queries - are you point place for customers to turn to when they need information
• Ads Coverage - what percentage of the queries are commercial
• Click through rates - next generation machine learning
• CPC - quality of traffic, conversion rates, ROI - work closely with partners

• Maps - indoor live view, navigate airports, malls and stations using AR

• Google news showcase - 1 bn investment - UK, Italy, Argentina, Australia

• Youtube 
• educational videos - 77% respondents used for learning new skills

• Youtube shorts 6.5 daily views as of march 

• Brand and performance goals. Advertisers are using youtube to reach people they cant find anywhere else, awareness to consideration to action. More people here than all of TV.

• Direct response, make it easier for people to buy. Purchases from creators directly from youtube. Product feeds can be directly brought on the video ads. 

• 2B monthly logged in users and 2B hours per day

• Violative view rate 1.6% down 70% from 2017

• Other revenues : Google play > Youtube > Hardware

• Chrome OS - 10 years - Chromebook fighting for K-12 education

• Signing multi-year multi-product partnerships through Cloud

• Univision, T-Mobile

• Very strong customer momentum in data cloud - Twitter

• AI/ML - Financial services, fraud and risk - HSBC

• Bigquery - business intelligence cloud

• Operational efficiency - migrating data center to Google Cloud

• Google workspace - nurses and retail store workers

• Waymo - 100 rides per week in Phoenix

• Calico - clinical stage programs for Cancer

• 7B investment in 2021 in US alone

2021 themes

• Building and providing useful services

• Quality of information, privacy and safety

• Strong Execution 

• Building sustainable value - Long term growth with financially sustainable businesses

Putting the Q1 numbers into historical perspective
Google's revenue in Q1 - this is a 34% jump in quarterly numbers
2021: $55.3 billion
2020: $41.2 billion
2019: $36.3 billion
2018: $31.1 billion
2017: $24.8 billion
2016: $20.3 billion
2015: $17.3 billion
2014: $15.4 billion
2013: $12.9 billion
2012: $10.6 billion
2011: $8.6 billion
2010: $6.8 billion
2009: $5.5 billion