Google reported 23% year-over-year revenue growth in its Q1 2022 financial results, surpassing the $68 billion mark in total revenue.

That’s up substantially from the $55.3 billion reported in Q1 2021 but a marked decline from the 34% growth rate reported at that time, when consumers’ informational needs were at their peak due to the pandemic.

Just ahead of its quarterly earnings call, parent company Alphabet distributed a media release that cited “strong growth in Search and Cloud” as major drivers.

Ruth Porat, CFO of Alphabet and Google, noted in the release that Google continues to make “considered investments in Capex, R&D and talent to support long-term value creation for all stakeholders.”

YouTube Revenue Growth Falls Short

YouTube brought in $6.87 billion in revenue which, as Bloomberg’s Mark Bergen pointed out, fell over $500 million shy of analyst expectations.

YouTube’s ad intake only went up 14.4% this past quarter, over $500 million shy of analyst expectations.

Could be Apple’s ad crackdown, TikTok competition or _____

— Mark Bergen (@mhbergen) April 26, 2022

The reduced growth rate in YouTube revenue can be attributed to the “lapping of the exceptional performance of direct response that they called out in the first quarter of 2021,” Porat reported.

Even so, Alphabet and Google CEO Sundar Pichai shared that YouTube now boasts over 2 billion monthly signed-in users.

He also confirmed that time spent on YouTube has continued to grow even as people have returned to in-person activities.

YouTube Shorts is a major growth driver that now garners over 30 billion daily views, four times as much as a year ago, Pichai said.

However, while Shorts views count toward a channel’s total watch time, they don’t help creators become eligible for monetization via the YouTube Partner Program (YPP).

Monetization is a focus YouTube will continue to work on over time, Pichai promised.

YouTube is also testing App Install and Video Action campaign ad formats right now, according to Phillipp Schindler, Chief Business Officer.

Google Investing In U.S., London, Warsaw & Nairobi

To help support its own flexible work plans, Pichai announced that Google plans to invest $9.9 billion in U.S. data centers and offices this year, creating 12,000 new Google jobs.

New office investments are also coming to London and Warsaw, as well as new product development facilities in Nairobi.

Cloud, AI, YouTube, and Search were priorities this past year and in 2021, Google spent over $40 billion in R&D in the U.S. alone.

More Key Highlights

Google reported:

• $18.3 billion, up 24%, with headcount growth accounting for the largest increase.
• $20.2 billion in operating income.
• $69 billion in free cash flow for the last 12 months.
• $52 billion in Class A and Class C shares repurchased in the last 12 months.
• That substantial growth in YouTube subscription revenues were offset by Play results.

Google Search and Advertising revenue grew $39.6 billion, up 24% led by retail and continued recovery in travel, Porat said.

Featured image: Shutterstock/Jane0606

Sources:
Alphabet Q1 2022 Earnings Call Webcast, YouTube
Alphabet Announces First Quarter 2022 Results, Alphabet Investor Relations