After Google shares had slumped by 2.2% during the day, they immediately rebounded after hours with the release of Q1 results and are currently up 1%.
Q1 results exceeded expectations.
Revenues rose 31% YOY to $14.0b. Net income (profits) rose16% to $3.35b. Google makes 55% of its revenues outside the UK. Indeed UK revenues – also up 31% YOY - totalled $1.39b in Q1. That’s 11% of Google’s total revenue and its largest market outside the US. It will be interesting to see what UK corporation tax they pay on this – if any.
Cost-per-click declined by 4%. This was largely due to the switch to mobile and looks a lower decline than might be expected. Operating expenses kept place with revenues but, strangely, the number of Google employees worldwide (55,891) was unaltered from a year back – they have lost staff from Motorola but put on staff in ‘core’ Google. Either they all got fabulous increases or (more likely) Google has been spending more on R&D and capital equipment.
Losses at Motorola Mobility continued to climb – to $271m in the quarter.
The future? Well, listening in to Larry Page he says he ‘get’s chills’ when he sees some of the stuff under development. Indestructible phones, batteries that last for ever. We should take this seriously. Remember this is a company that has already launched Google Glass and driver-less cars!
All-in-all, a pretty impressive set of results.