Alphabet (GOOG) Posts Q1 adj.-EPS of $7.50, Misses Views

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Price: $157.95 -1.96%

Revenue Growth %: +15.4%

Financial Fact:
Provision for income taxes: 912M

Today's EPS Names:
FRSB, DGICA, UXIN, More

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(Updated - April 21, 2016 4:04 PM EDT)

Alphabet (NASDAQ: GOOG) reported Q1 EPS of $7.50, $0.46 worse than the analyst estimate of $7.96. Revenue for the quarter came in at $20.26 billion versus the consensus estimate of $20.38 billion.

Q1 2016 Google segment summary

Revenues and monetization

Google segment revenues by source (in millions; unaudited):

	Three Months Ended March 31, 2015	Three Months Ended March 31, 2016	Change from Q1 2015 to Q1 2016 (YoY)
Google segment
Google websites	$11,932	$14,328	20%
Google Network Members' websites	3,576	3,692	3%
Google advertising revenues	15,508	18,020	16%
Google other revenues	1,670	2,071	24%
Google segment revenues	$17,178	$20,091	17%

Paid clicks and cost-per-click information (unaudited):

	Change from Q1 2015 to Q1 2016 (YoY)	Change from Q4 2015 to Q1 2016 (QoQ)
Aggregate paid clicks	29 %	(3)%
Paid clicks on Google websites	38 %	(4)%
Paid clicks on Google Network Members' websites	2 %	4 %

Aggregate cost-per-click	(9)%	0 %
Cost-per-click on Google websites	(12)%	2 %
Cost-per-click on Google Network Members' websites	(8)%	(12)%

Traffic acquisition costs (TAC) and operating income

TAC to Google Network Members and distribution partners, operating income, and SBC expense (in millions; unaudited):

	Three Months Ended March 31, 2015		Three Months Ended March 31, 2016
TAC to Google Network Members	$2,432		$2,571
TAC to Google Network Members as % of Google Network Members' revenues	68	%	70	%
TAC to distribution partners	$913		$1,217
TAC to distribution partners as % of Google website revenues	8	%	8	%
Total TAC	$3,345		$3,788
Total TAC as % of Google advertising revenues	22	%	21	%

	Three Months Ended March 31, 2015		Three Months Ended March 31, 2016
Operating income, excluding SBC expense	$6,243		$7,588
SBC expense	$1,055		$1,316
Operating income	$5,188		$6,272

Adoption of new accounting guidance

In Q1 2016, we early adopted Accounting Standards Update No. 2016-09 "Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting," which changes several aspects of the accounting for share-based payments, including income tax consequences and classification on the consolidated statement of cash flows. Starting this quarter, certain tax benefits are reflected in our consolidated statement of income, whereas they were previously recognized in equity. Additionally, our consolidated statements of cash flows now present such tax benefits as an operating activity and the prior period is adjusted accordingly.

For earnings history and earnings-related data on Alphabet (GOOG) click here.

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