In Q1 2024, Google Cloud’s revenue surged 28% to $9.57 billion, fueled by the demand for generative AI tools reliant on cloud infrastructure, services, and apps. This positive momentum continued from the previous quarter, which saw 25.66% year-over-year growth.
Operating income for Google Cloud nearly quintupled to $900 million, a jump from $191 million. Investors welcomed this performance, along with Alphabet’s announcement of its first-ever dividend of 20 cents per share and a $70 billion share buyback program.
Meanwhile, Google Search and other revenue increased by 14.4% to $46.15 billion in the first fiscal quarter. YouTube’s revenue grew 20% year-over-year to $8.09 billion, down slightly from Q4 2023’s $9.2 billion. Google’s overall advertising business rose by 13% year-over-year, reaching $61.6 billion.
In contrast, Alphabet’s Other Bets category, including self-driving vehicle subsidiary Waymo, was less successful. Although revenue rose 72% to $495 million in Q1, Other Bets lost $1.02 billion, mirroring its loss in Q4 2023. This segment typically does not yield profits.
Alphabet’s total revenue reached $80.5 billion, an increase of 15% year-over-year, with net income at $23.7 billion (up 57%). Beyond Google Cloud’s strong performance, a reduced headcount may have contributed to the successful quarter; Alphabet reported a 5% workforce reduction, bringing the total to 180,895 employees.
Alphabet CEO Sundar Pichai, said: “Taking a step back, it took Google more than 15 years to reach $100 billion in annual revenue,. In just the last six years, we’ve gone from $100 billion to more than $300 billion in annual revenue. … This shows our track record of investing in and building successful new growing businesses.”
During a call with investors, Pichai projected that YouTube and Google’s cloud businesses would achieve a combined annual run rate of over $100 billion by the end of 2024. In 2023, the divisions’ combined revenue stood at $64.59 billion, with Google Cloud earning $33.08 billion and YouTube generating $31.51 billion.”
Google Cloud Driving Innovation in the Insurance Industry
Google Cloud is currently partnering with a variety of carriers worldwide, including major companies like Generali and CNA, as well as smaller start-ups. Additionally, the cloud provider has teamed up with Munich Re to explore semi-supervised learning in machine learning, which research suggests can reduce the cost of training vision models.
Moreover, Google Cloud and Munich Re have collaborated on a project to use generative AI to enhance disaster response efforts, among others.
Nigel Walsh, Head of Global Insurance, Google Cloud, commented on the news, stating via social media: “[Its] hard not to be both excited for the future and proud of the entire team that got us here! [I’m] delighted to be a small part in the continued rocketship that is Google Cloud – revenue jumped 28% this quarter to $9.57bn, with American Family Insurance even getting a call out on the earnings call!”
He continued: “Our focus on Data, Security and of course AI, our approach to the enterprise and of course for me and all the teams leaning into Insurance, our domain first approach that allows us to leverage the best technology to solve critical Insurance challenges world over across claims, underwriting, customer and so much more!”
Walsh added: “A huge thanks to all our customers, partners and teams that make this better and better each day! Excited for what’s ahead!”
