Google’s Q1 2024 Financial Results: Revenue Growth Amid Challenges
Google reported mixed first-quarter financial results, with revenue reaching $15.42 billion (including traffic acquisition costs) and earnings per share (EPS) of $6.27. While showing year-over-year growth, these figures fell short of Wall Street expectations.
Key Financial Highlights
- Revenue (ex-TAC): \(12.20 billion (vs. \)12.25 billion expected)
- Total Revenue: \(15.42 billion (vs. \)15.54 billion expected)
- EPS: \(6.27 (vs. \)6.40 expected)
- Year-over-Year Revenue Growth: 19%
- GAAP Operating Income: $4.12 billion (27% of revenue)
Market Reaction & Stock Performance
Following the earnings release:
- Regular Trading: Shares rose ~4%
- After-Hours Trading: Dropped >4% post-announcement
The decline reflects investor concerns despite Google’s continued double-digit growth.
Critical Metrics Analysis
Advertising Performance
- Cost-Per-Click (CPC): Declined 9% year-over-year
- Paid Clicks Growth: Increased 26% year-over-year
While higher click volume offset some revenue impact, the persistent CPC decline suggests changing dynamics in Google’s core advertising business.
Geographic Revenue Breakdown
- U.S. Contribution: 57% of total earnings (up 1% YoY)
Traffic Acquisition Costs (TAC)
- Q1 TAC: $3.23 billion (23% of revenue)
- Historical Comparison:
- Q4 2023: 23.5%
- Q1 2023: 24.9%
The TAC percentage shows modest improvement year-over-year.
Special Considerations
- Stock Split Impact: Current EPS reflects ~50% reduction due to Google’s recent stock split
- Discontinued Operations: $198 million net loss (primarily from Motorola divestiture)
Contextual Analysis
While Google missed analyst projections, the company maintains:
- Strong double-digit revenue growth
- Significant operating margins (27%)
- Robust paid click growth
The market’s elevated expectations (trailing P/E ratio >30) contributed to the negative reaction despite fundamentally solid performance.
Note: All financial figures represent GAAP measurements unless otherwise specified.
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