Google’s parent company topped revenue and profit estimates and said that it would offer a stock dividend for the first time.
On Thursday, Alphabet, Google’s parent company, reported strong revenue growth in its latest quarter from its search engine and video platform, YouTube, as its market-leading position in online advertising continued to reap rewards despite recent fluctuations in the industry.
Alphabet reported $80.5 billion in quarterly sales, up 15 percent from a year earlier, and above analysts’ estimate of $78.8 billion. Profit climbed 36 percent to $23.7 billion. Analysts had expected $18.9 billion.
Alphabet announced that for the first time, it would give shareholders a dividend of 20 cents per share, to be paid on June 17. The company’s board also approved a $70 billion share repurchase program. Alphabet shares rallied 13 percent in after-hours trading.
The digital advertising industry has ebbed and flowed in the last two years. In 2022, higher inflation and interest rates made advertisers more reluctant to spend, in a blow for Google and its competitors like Meta, the owner of Facebook and Instagram. Google’s search engine has proved most resilient to the fluctuations that have happened since, emphasizing its role as a gateway to the internet for billions of people.
Alphabet continues to print tens of billions of dollars in profit from advertising each year and has been using its funds to bankroll an aggressive push into generative artificial intelligence as part of an escalating race with Microsoft and OpenAI, the maker of the chatbot ChatGPT. Alphabet said that it spent $11.9 billion on research and development in the first three months of this year, a 4 percent rise.
In the last year, Google has incorporated A.I. into nearly every facet of its product portfolio — answering some user questions in the search engine, helping content creators make videos on YouTube and suggesting ways to start drafting on Google Docs.