In the first quarter of this year, Alphabet Inc-CL C's parent company, Alphabet, recorded the slowest growth in revenue in two years, and profits fell more sharply than Wall Street expected, reflecting the impact of the global economic turmoil on the digital advertising industry.

After the US stock market opened on Tuesday, April 26th, Alphabet announced:

• First-quarter revenue was $68.011 billion, up 23 per cent from the first quarter of last year and the slowest year-on-year growth since the end of 2020, with analysts expecting $67.98 billion and 32 per cent year-on-year growth in the fourth quarter of last year.

• Advertising performance indicator-the traffic acquisition cost (TAC) paid by guide inbound traffic partners recorded $11.99 billion in the first quarter, up 23.46% from a year earlier, accounting for 17.63% of revenue and 17.8% in the fourth quarter of last year. Excluding TAC, revenue was $56.02 billion, up 23% from a year earlier, and analysts expected $56.077 billion.

• First-quarter diluted earnings per share (EPS) was $24.62, down 6.35 per cent from a year earlier, while analysts expected $25.71, up nearly 38 per cent year-on-year in the fourth quarter of last year.

• First-quarter net profit was $16.436 billion, down 8.3% from a year earlier, while analysts expected $17.4 billion, up 35.6% from a year earlier in the fourth quarter of last year.

• The first-quarter operating profit was 20.094 billion US dollars, up 22.2% from the same period last year, nearly 40% in the fourth quarter of last year, and 30% in the first quarter, unchanged from 28.8% in the same period last year and 29% in the fourth quarter of last year.

Alphabet also announced that the board of directors decided to authorize the company to buy back up to $70 billion of Class An and C shares, which are expected to take place from time to time depending on factors such as the overall business and market environment, either in the open market or through privately negotiated transactions.

Alphabet class A shares, which closed down more than 3 per cent on Tuesday, fell further after the results were announced, falling as much as 7 per cent at one point.

The growth rate of advertising revenue has slowed significantly compared with the previous quarter. YouTube advertising is lower than expected.

The financial report shows that among the main businesses of Alphabet, the advertising revenue of Alphabet Inc-CL C, the core revenue source, was higher than expected in the first quarter, while the advertising revenue of YouTube was lower than expected, and the growth rate of Alphabet Inc-CL C's advertising revenue was far lower than that of the previous quarter:

• Alphabet Inc-CL C's service revenue in the first quarter was $61.47 billion, up 20.1% from a year earlier, below analysts' expectations of $62.58 billion and up 31.3% in the fourth quarter of last year. Alphabet Inc-CL C's operating profit in the same quarter was $22.92 billion, an increase of about 17.3% over the same period last year, and analysts expected $22.15 billion.

• Among Alphabet Inc-CL C's services, Alphabet Inc-CL C Advertising earned $54.661 billion in the first quarter, up 22.3% from the same period last year, while analysts expected it to be $54.13 billion, up nearly 33% in the fourth quarter of last year.

• Among Alphabet Inc-CL C ads, Alphabet Inc-CL C search's advertising revenue in the first quarter rose 24.3% from a year earlier to $39.618 billion, while YouTube advertising revenue in that quarter increased by about 14.4% to $6.869 billion, and analysts expected an increase of 23.2% to $7.4 billion, compared with 35.7% and 25.4% respectively in the fourth quarter of last year.

This is YouTube advertising revenue is once again lower than expected. Its advertising revenue in the first quarter was 20.4% lower than that in the fourth quarter of last year, with revenue of $8.63 billion in the fourth quarter of last year, and the market is expected to be $8.87 billion.

Media comments believe that YouTube's advertising revenue is far lower than expected may be due to iPhone advertising positioning restrictions, as well as competition from TikTok.

In addition, Ruth Porat, chief financial officer of Alphabet, told the media that Alphabet had received the impact of reduced advertising spending in the European market after the conflict between Russia and Ukraine. There are many uncertainties in the macro environment.

Google Cloud maintains high income growth and loss higher than expected

Alphabet Inc-CL C, which is seen as an important revenue engine in the future, has maintained a high income growth rate of more than 40 per cent, but has not yet made a profit and lost more than expected.

• Google's first-quarter revenue was $5.82 billion, up 43.8 per cent from a year earlier, maintaining an average of more than 40 per cent year-on-year growth last year and above analysts' expectations of $5.77 billion.

• Alphabet Inc-CL C Yun continued to report a loss of $931 million in operating profit in the first quarter, up from $890 million in the fourth quarter of last year, but 4.4% lower than analysts' expected loss of $893.2 million.