- The fallout from the coronavirus pandemic saw YouTube advertising revenue drop 14% compared to the previous quarter;
- Performance was strong during the first two months of the quarter, but then in March the firm experienced a significant slowdown.
Alphabet, Google‘s parent company, surpassed analysts’ expectations for quarterly revenue as it posted double-digit advertising growth despite the economic slowdown from the coronavirus crisis. Alphabet’s overall revenue in the first quarter was $41.2 billion, up 13% compared with the same period last year.
The fallout from the coronavirus pandemic saw YouTube advertising revenue drop 14% compared to the previous quarter, but on a year-over-year basis the figure was still up over 33%.
According to the company’s regional breakdown, “Other Americas” – which encompasses Latin America, Caribbean and Canada” – generated revenues of $2.2 billion, also registering an increase of 13% year-on-year. The region’s results compared to the last quarter of 2019, though, displayed the worst performance among all, with a decline of 19% in revenues, strongly affected by local currencies devaluations.
“The decline in APAC [Asia-Pacifc] was more muted just given the uneven impact of COVID and the nature of our business across the region and then the impact in EMEA [Europe, Middle East and Africa] was first evident in mid-February with a steeper fall off in March and in the second week of March, we then saw results in the U.S. as well as other Americas fall off shortly”, said Ruth Porat, CFO of Alphabet, during a call with investors.
Good news for investors
Shares in Alphabet spiked 8% in after-hours trading following the release of the tech giant’s earnings results, as estimates for the company among Wall Street analysts were shaky. “Performance was strong during the first two months of the quarter, but then in March we experienced a significant slowdown in ad revenues” Porat said.
To offset the lower ad revenue, Alphabet is “sharpening focus on executing more efficiently, while continuing to invest in our long-term opportunities.”