Alphabet revenue grows by 15%, announces first dividend

The news pleased investors and lifted company stock by nearly 16% in after-hours trading pushing Alphabet’s market cap past $2 trillion. 

Published - April 26, 2024 01:57 pm IST

FILE PHOTO: Google parent company, Alphabet has announced its first-ever dividend and a $70 billion share buyback.

FILE PHOTO: Google parent company, Alphabet has announced its first-ever dividend and a $70 billion share buyback. | Photo Credit: Reuters

Google parent company, Alphabet has announced its first-ever dividend on Thursday and a $70 billion share buyback after the company reported results that exceeded analyst expectation. The news pleased investors and lifted company stock by nearly 16% in after-hours trading pushing Alphabet’s market cap past $2 trillion. 

Alphabet’s move follows Meta’s announcement for its own first-ever dividend three months ago which sent company valuation surging by $196 billion the following day. Shareholders will be paid a dividend of 20 cents per share. 

Revenue for the Sundar-Pichai led company grew 15% from $69.79 billion compared to a year earlier showing the fastest rate of growth since early 2022. Alphabet also beat expectations for YouTube advertising revenue and cloud revenue. 

During the earnings call, Pichai spoke about how Google’s AI offerings had helped its core search business saying there was an “increase in search usage among people who are using the AI overviews.” 

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But revenue but powered mainly by the increasing demand for its cloud services due to widespread adoption of artificial intelligence. Google Cloud revenue grew 28% in the quarter, due to a boom in generative AI tools that depend on cloud services to reach customers. 

Meanwhile, Alphabet also has been spending heavily on artificial intelligence to add generative AI tools and features across their businesses. The company’s capital expenditure was at $12 billion, 91% more compared to a year earlier. CFO Ruth Porat said on the call that she expected for expenditure to remain at the same level or grow even more throughout the year because of continued interest in artificial intelligence.

Porat also clarified that operating margins in 2024 would also be higher than last year but didn’t explain the reason why. 

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