YouTube slowdown hurts Alphabet’s first quarter results; Earnings and revenue lose sending shares that collapse after business hours

Shares of Google’s parent company Alphabet and YouTube fell 5% after the tech giant reported lower-than-expected first-quarter results on Wall Street.

The YouTube video subsidiary, which went bankrupt in the past few quarters, experienced slow growth during this period. Ad revenue on the platform increased 14% to $ 6.87 billion. Executives said the comparison was hurt by heavy direct response advertising in the previous quarter of last year.

Speaking with analysts at a conference to discuss the findings, CFO Ruth Porat said the Russian invasion of Ukraine had a “huge impact” on YouTube ads. Alphabet has suspended joint operations in Russia, as well as other US companies, and many advertisers have cut their YouTube advertising spend, particularly from European companies. When asked about the long-term impact of the quarter, she said it was “too early to comment” as hostilities continued.

Revenue increased 23% to just over $ 68 billion. Earnings for the stock fell to $ 24.62 from $ 26.29 a year earlier, missing the consensus forecast of Wall Street analysts by more than a dollar. The highest sales rate was also lower than estimates.

Shares of Alphabet, which fell 3% on the normal trading day, fell nearly another 5% after hours and fell to around $ 2,263.10. It just dropped to its lowest point in nearly a year.

With repeated pressure from analysts on the state of YouTube, which faces a wave of newcomers like TikTok, executives have repeatedly confirmed the strength of the video division. About 2 billion registered users log into the system every month, and developers upload content in an unprecedented clip.

The management team also announced YouTube Shorts, a growing short-form extension that has increased over the past couple of years. Google has launched a $ 100 million fund to reward creators of the most popular short films, an incentive program that operates in more than 100 countries. Chief Commercial Officer Philip Schindler says around 40% of the total creator population will receive revenue from the fund in 2021.

Shorts, a direct competitor of TikTok, now amass 30 billion daily views. “We also look at the ads in Shorts,” said Schindler, “and campaigns with early results are encouraged.” We are working very hard on what monetization could look like in the future. “

The litmus test of advertisers’ appetite for YouTube will be next month’s annual Brandcast event. The sophisticated Plaza for Media Buyers moved into main broadcast last week, with a show scheduled at New York’s Broadway Theater on May 17. This will be the first personal branding broadcast of 2019 as Covid restrictions are loosened again.