Shares in Google and parent slowed 5% in after-hours trading after the tech giant reported positive results from the first quarter down to Wall Street expectations.
YouTube, a video company that has been on a break in recent quarters, posted moderate growth in the period. Ad revenue on the platform increased 14% to $6.87 billion. Comparisons suffered from strong direct-response advertising in the year-ago quarter, according to executives.
According to analysts on a conference call to discuss the results, Russia's invasion in Ukraine had an "outsized impact" on YouTube ad campaigns. Alphabet paused its total operations in Russia, as did a host of other U.S. businesses, and many advertisers were forced to withdraw from YouTube advertising spending in the quarter. The question was "too early to comment."
Revenue increased by 23% to a bit more than $68 billion. In the year-earlier period, earnings per share fell to $24.62 from $26.29, obstructing Wall Street analysts' consensus forecast by more than a dollar. The top-line sales figure also fell short of expectations.
Alphabet stock, which fell 3% during the regular trading day, fell more than 5% after hours to around $2,263.10, the company's lowest level in over a year.
Analysts have been raped repeatedly about the state of YouTube, which faces a wave of new competitors like TikTok. Several executives have repeatedly affirmed the power of the video outlet. About 2 billion registered users register each month and creators are posting content at a record clip.
YouTube Shorts, the rapidly developing short-form extension, has been added by Google for the past couple of years. It has established a $100 million fund to reward the creators of the most-viewed shorts, a program that will benefit over 40% of the total population of creators in 2021, according to Chief Business Officer Philipp Schindler.
Shorts, a direct competitor with TikTok, now has 30 billion daily views. "We're also testing advertisements on Shorts," Schindler said, adding that "we're also testing the results, and campaigns are encouraged by the early results.... We're very assessing what monetization might look like in the future."
The annual Brandcast event, which will focus on media buyers, will have shifted into the main broadcast upfront week, allowing the showcase at a Broadway theater in New York on May 17. The first in-person Brandcast will be since 2019 as Covid restrictions continue to decrease.