- Alphabet Inc (NASDAQ: GOOGL) (NASDAQ:GOOG) recently reported record stock buybacks despite the economic uncertainty. Alphabet bought $8.5 billion of its own shares in Q1 alone.
Alphabet Inc (NASDAQ: GOOGL) (NASDAQ:GOOG) recently reported record stock buybacks despite the economic uncertainty, according to Bloomberg. This also comes at a time when S&P 500 companies are expected to reduce buybacks by an estimated 50% this year based on data compiled by Goldman Sachs.
Alphabet bought $8.5 billion of its own shares in Q1 alone. This is the highest in any quarter in the company’s history and quadruple the spending on buybacks at the start of 2019.
“We believe a share repurchase program for us, appropriately sized, is responsible in the current environment based on our capital allocation framework and our cash balance,” said Alphabet Inc (NASDAQ: GOOGL) (NASDAQ:GOOG) Chief Financial Officer Ruth Porat during the conference call on Tuesday. “In the beginning of the year, I indicated that we expected to repurchase shares at a pace at least consistent with the fourth quarter on the remaining authorization, and that remains our view for the second quarter.”
In terms of employees, Alphabet also grew its headcount by 19% to 123,048 employees in Q1 2020. But Alphabet has been reducing its spending on marketing and hiring during the economic crisis.
For the quarter, Alphabet Inc (NASDAQ: GOOGL) (NASDAQ:GOOG) announced revenue of $41.2 billion, net income of $6.8 billion, and earnings per share of $9.87. For the same quarter last year, Alphabet had revenue of $36.3 billion, net income of $8.3 billion, and earnings per share of $11.90.
This is the first full quarter that Sundar Pichai oversaw Alphabet and Google as CEO.
“Given the depth of the challenges so many are facing, it’s a huge privilege to be able to help at this time,” explained Pichai. “People are relying on Google’s services more than ever, and we’ve marshaled our resources and product development in this urgent moment.”
Google’s advertising unit reported $33.8 billion of that revenue, making up 82% of the total revenue.
“Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues,” Porat added.
The traffic acquisition costs were up 8.6% to $7.45 billion.
What about Google Cloud? The Google Cloud unit is now adding about 3 million new users every day. And it saw a 30-fold increase in usage since January. Now there are over 100 million daily Meet meeting participants.
Google Cloud revenues in Q1 2020 hit $2.78 billion. This is up 52% from $1.83 billion in the same quarter a year ago.
Ads on YouTube hit $4.04 billion in Q1 2020. This is up from $3.03 billion during the same quarter last year.
The Google other unit — which includes hardware sales like Pixels and Chromebooks— hit $4.4 billion. Other Bets (includes moonshot projects) took a big hit in Q1 2020 compared to the same quarter a year ago As revenue was down 21% to $135 million and the losses were up 29% at $1.1 billion.
Other Bets include Calico, CapitalG, DeepMind, GV, Google Fiber, Loon, Sidewalk Labs, Verily, Waymo, Wing, and X.
Disclosure: I own a small number of Alphabet shares
