Google’s financial performance in the first quarter of 2022 summarized
Google (Parent company: Alphabet; NASDAQ: GOOGL) experienced impressive revenue growth in the first quarter of 2022 compared to the same period in the prior year. The company experienced growth in both its advertising and non-advertising revenues. While the consolidated net revenues of Google increased in 2022 first quarter, its net income declined compared to the same quarter of last year.
The two leading sources of Google’s revenues are advertising and cloud services. Search advertising is the largest source of revenue for the search giant. Another important source of advertising revenue for the company is YouTube.
Alphabet’s total net revenues in the first quarter of 2022 reached $68 billion. Compared to the same quarter of the prior year, the company experienced an increase of $12.7 billion in its net revenue or year on year 23% revenue growth. The company had generated $55.3 billion in the first quarter of 2021.
Alphabet’s net income in the first quarter of 2022 was lower compared to the same period in the prior year. The tech giant generated $16,436 million in net income in the first quarter of 2022 compared to $17,930 million in the first quarter of 2021. Its net income was $1,494 million lower in the first quarter of the latest fiscal compared to the prior year’s first quarter or year on year decline of 8%.
The operating income of the tech giant increased by 22% in the first quarter of 2022 compared to the same quarter of the prior year. The company generated $20.1 billion in operating income in Q1 2022, compared to $16.44 billion in the first quarter of the prior year; year on year increase of $3,657 million. Its operating margin during the first quarters of 2021 and 2022 remained 30%.
Advertising revenue of Google in Q1 2022:
Alphabet has divided its business into two main segments including Google and other bets. Google generates its revenue from services and mainly advertising services. Its search revenue includes the revenue generated from search advertising and advertising on other Google properties including Gmail, Google Maps and Google Play. The advertising revenue of Google includes search advertising and advertising on YouTube and Google network properties that participate in AdMob, Adsense and Google Ad Manager.
Google’s total advertising revenue in the first quarter of 2022 increased to $54,661 million compared to $44,684 million in the first quarter of 2021.
Its search advertising revenue increased to $39.62 billion in the first quarter of 2022 compared to $31.9 billion in the same quarter of the prior year; year on year growth of 24%.
Google’s revenue from YouTube ads increased by $864 million or 14.5% in the first quarter of 2022 compared to the first quarter of 2021. YouTube ads brought $6,869 million for Google in the first quarter of 2022 compared to $6,005 million in the same quarter of 2021.
Advertising revenue from Google’s network properties increased by $1,374 million or 20% in the first quarter of 2022. Google network properties generated $8,174 million in the first quarter of 2022 compared to $6,800 million in the first quarter of the prior year.
The services revenue of Google include its advertising revenue and the revenue Google generates from other sources or ‘Google Other’. It includes the following:
– Revenue from Google Play including the sales of apps and in-app purchases, and digital content sold on Google Playstore.
– Devices and services including fitbit wearable devices, Google Nest Home Products, and Pixel smartphones.
– YouTube non-advertising revenue sources including YouTube Premium, YouTube TV subscriptions and
– some other products and services.
Google Other Revenue in the first quarter of 2022 remained $6,811 million compared to $6,494 million in the first quarter of 2021.
Non-advertising revenue of Google in the first quarter of 2022:
The non advertising revenue of Google includes the revenue from cloud services and other bets. Google’s other bets revenue mainly includes the revenue the company generates from health technology and internet services.
Google Cloud revenue in the first quarter of 2022 remained $5,821 million compared to $4,047 million in the first quarter of 2021. Other bets generated $440 million in the first quarter of 2022 compared to $198 million in the first quarter of 2021.
| Q1 2022 | Q1 2021 | |
| Google search & other | $39,618 | $31,879 |
| YouTube ads | $6,869 | $6,005 |
| Google Network | $8,174 | $6,800 |
| Google advertising | $54,661 | $44,684 |
| Google other | $6,811 | $6,494 |
| Google services total | $61,472 | $51,178 |
| Google Cloud | $5,821 | $4,047 |
| Other Bets | $440 | $198 |
| Hedging gains | $278 | $(109) |
| Total revenues | $68,011 | $55,314 |
COSTS & EXPENSES OF GOOGLE IN THE FIRST QUARTER OF 2022
Alphabet’s total cost of revenues in the first quarter of fiscal 2022 remained $29,599 million compared to $24,103 million in the first quarter of 2021. The company spent $9,119 million on research and development in the first quarter of 2022 compared to $7,485 million in the first quarter of 2021.
The other major expenses incurred by Google include sales and marketing and general and administrative expenses. Google spent $5,825 million on sales and marketing in the first quarter of 2022 compared to $4,516 million in the first quarter of 2021. The general and administrative expenses of the company in the first quarter of 2022 remained $3,374 million compared to $2,773 million in the first quarter of 2021. The total costs and expenses of Alphabet Inc in 2022 Q1 remained $47,917 million compared to $38,877 million in the first quarter of 2021.
Geographical revenues of Google in the first quarter of 2022:
Alphabet has divided its business operations into four geographic segments including United States, EMEA, APAC, and Other Americas.
Alphabet experienced growth in revenue across all its geographical markets in the first quarter of 2022 compared to the first quarter of 2021. The largest geographical market of Google (Alphabet) is the United States, which accounts for a substantial part of the company’s net revenue. In the first quarter of 2022, United States accounted for 47% of the company’s revenue compared to 45% in the first quarter of 2021. Alphabet generated $31,733 million in 2022 Q1, compared to $25,032 million in the first quarter of 2021.
Other significant markets of Alphabet include EMEA, and APAC. Google’s revenue from EMEA (Europe, Middle East & Africa) increased to $20,317 million or 30% of total net revenue of the company for the quarter in 2022 Q1. During the same quarter of the previous year Google’s net revenue from EMEA remained $17,031 million or 31% of the net revenue of the company for the quarter.
Revenue from APAC (Asia Pacific) in the first quarter of 2022 remained $11,841 million or 17% of the company’s net revenue for the quarter compared to $10,455 million in the first quarter of 2021 or 19% of the company’s net revenue for the quarter.
Other Americas accounted for 6% of the company’s net revenue for the quarter during q1 2022. This geographic segment includes Canada and Latin America. Alphabet generated $3,842 million from other Americas in the first quarter of 2022 compared to $2,905 million in the first quarter of 2021.
The following table shows the geographic revenue distribution of Alphabet for the first quarter of 2022:
| Region | 2022 q1 | 2021 q1 |
| United States | $31,733 | $25,032 |
| EMEA | $20,317 | $17,031 |
| APAC | $11,841 | $10,455 |
| Other Americas | $3,842 | $2,905 |
| Hedging Gains | $278 | $(109) |
| Total revenues | $68,011 | $55,314 |