
Alphabet Q1 2018 Earnings [pdf] - haberdasher
https://abc.xyz/investor/pdf/2018Q1_alphabet_earnings_release.pdf
======
chollida1
My notes....

Numbers:

\- Alphabet 1Q EPS $13.33, Est. $9.300

\- free cash flow for the first quarter of $4.34 billion.

\- 1Q Google Other Rev. $4.35B

\- 1Q Rev. Ex-TAC $24.9B, Est. $24.3B

\- Capital expense for Google more than triples: up from $2.4 billion to $7.7
billion year-on-year. That probably reflects spending on hardware, including
the Nest division.

\- Porat says that CapEx was "almost completely split" between paying for
machines ("compute capacity") and paying for real estate.

\- Without Nest, the "Other Bets" operating loss narrowed to $571 million from
$703 million a year earlier.

\- The company has discussed making annual stock grants to executives and
other employees in the first quarter, and it's not clear yet how much that
dragged down Alphabet's operating profit.

Ads

\- 1Q Paid Clicks +55%

\- Our first new glimpse at Google's network business: impressions on Networks
sites stayed flat for the quarter, but the cost-per-impression went up 18
percent. Translation: Google is getting steady growth out of its display
business.

Misc:

\- added nearly 5,000 employees in the quarter, to 85,050 as of March 31. That
works out to more than 50 new hires a day in a 90-day quarter.

\- Porat also says the company has been working on the GDPR compliance for 18
months. "We've changed our policy as needed. We are also providing users with
strong user controls and privacy settings and privacy check ups," she told
Bloomberg Television.

\- Porat says Waymo has achieved 5 million miles of driving on city streets.

~~~
tristanj
> _Capital expense for Google more than triples: up from $2.4 billion to $7.7
> billion year-on-year_

Part of that also comes from Google buying up $1 billion of north Sunnyvale
properties over the past year [0]. They bought roughly 50 properties. The
article [0] has a nice map that shows since July 2017 Google has bought up
roughly _half_ of the Sunnyvale Moffet Park area.

I am mildly surprised how little coverage Google's buying spree has received.

[0] [https://www.mercurynews.com/2017/12/22/google-expansion-
ques...](https://www.mercurynews.com/2017/12/22/google-expansion-quest-
produces-sunnyvale-city-land-deal/)

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alberth
Their efficiency is impressive.

On an annualized basis, they are doing ~$120B.

They have ~85k employees.

That means they are generating ~1.5M Revenue Per Employee.

That's crazy

~~~
kgwgk
If anyone is curious about what companies in the S&P 500 rank higher in the
revenue per employee metric: [https://craft.co/reports/s-p-500-revenue-per-
employee-perspe...](https://craft.co/reports/s-p-500-revenue-per-employee-
perspective)

~~~
ghazak
That kinda revenue with those profit margins are the insane thing. I’m less
impressed at revenue per employee generated from oil.

~~~
kgwgk
Operating margin is 22%, not bad (better than many, probably most, of the
companies on that list) but not insane. Apple is better on both metrics.

------
simonebrunozzi
My bet is that Google is poised to become a strong market protagonist in the
Public Cloud / Infrastructure space, within the next few years.

I have admired the stability and the maturity of their technology platform
since my AWS days.

~~~
drusepth
I have had nothing but good experiences in using Google Cloud. The only issues
I've had is in other tools/libraries being specifically targeted at AWS and
not working with other tools. Seems like the kind of thing that fixes itself
as GC gets bigger / more used.

------
sounds
Double EPS (non-GAAP) from $7.73 to $13.33...

On the downside, effective tax rate is down to 11%. That's concerning because
the EU is very unhappy about the whole "double Irish with a Dutch sandwich."

~~~
fjsolwmv
What does EU care about how much Google pays in US tax?

~~~
kgwgk
That’s the global tax.

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sjilo
How does a company like Alphabet have so much space to grow at this point?

~~~
aphextron
They didn't grow. They got a tax cut.

~~~
product50
Their revenue grew 26% yoy. That has nothing to do with tax cuts. Stop letting
your confirmation bias cloud your judgment.

------
jacksmith21006
Strong quarter again for Google. Pretty amazing to grow faster as the numbers
get bigger.

~~~
spiderPig
Wow you're either a Google employee or huge fanboy. Every single one of your
comments is pro-google/anti-apple.

~~~
mrep
I thought you were kidding but 3 pages in and not a single one outside those 2
topics.

~~~
el_cid
I thought you were exaggerating but this guy is the closest thing to what
people call "shill" that I have ever seen on HN.

~~~
Gigablah
And people like ocdtrekkie are virulently anti-google, but I guess you don’t
have a problem with that.

------
7373737373
Earnings call:
[https://www.youtube.com/watch?v=KR6JCmoEIUw](https://www.youtube.com/watch?v=KR6JCmoEIUw)

------
obilgic
eps doubles and shares are down...

~~~
kgwgk
EPS doubles (actually grows 72%) due to some one-time adjustments.

Revenue is up 26% year-over-year. Operating income is up 6.6% year-over-year.

The stock is up ~25% over the last 12 months, by the way.

------
aphextron
>Effective tax rate 11%

Absolutely obscene. Literally their entire Net Income increase from $5.4b to
$9.4b is due to a tax cut from 20%. We will be paying for this Republican tax
policy for the rest of our lives.

~~~
rayiner
Corporate tax raises relatively little revenue, and most Western European
countries don’t rely on it much because its easier to tax individuals.

If we don’t want to be getting more in debt we should raise taxes on middle
class people to the level of say Germany. In a state like California, our
taxes on rich people and corporations are already about as high as in Germany,
its our taxes on people making sub-200k that really dramatically lower. That’s
where most of the income is—in the 50-99% range.

~~~
okreallywtf
That may be true (I haven't checked), but my guess is that germany (and most
other western nations) offer a lot more government services for that level of
tax. Taxing the middle class here the same as say, norway doesn't make sense
unless you offer the same services. My half-decent insurance plan is one of my
biggest monthly expenses and I'm lucky that it doesn't impact me too much.
Many other "middle-class" people are barely getting by as it is.

~~~
rayiner
> Taxing the middle class here the same as say, norway doesn't make sense
> unless you offer the same services.

My point is that the bellyaching in America is targeted at the wrong thing.
It's not about how much taxes rich people or corporations pay. That's not why
Germany has free education and we don't. It's that a household making $100k
pays 20% taxes here and 40% in Germany. That's the major difference between
the countries.

~~~
refurb
Exactly. Lots of talk of taxing the rich, but if you look at other countries,
the "rich" are clearly middle class. No other way to raise enough revenue.

