Alphabet made available its financial results for Q1 2017 today and while the overall headline - 22-percent revenue increase YOY for Q1 2017 - is impressive enough, there are some equally interesting aspects hidden between the lines. As is always the case, it is clear that Search and ad-revenue forms the bread and butter of much of what Alphabet declared today. However, the minority figures are starting to show their own value and worth. At least, for “Google other revenues” which is in stark contrast to Alphabet’s “other bets” which seem to be swinging further in the opposite direction.
Starting with the ‘other revenues’, this is best understood as most things outside of the Search and ad sphere. So hardware would be one example, which as we know is a line that Alphabet and Google have invested heavily in since this time last year. While Google’s Cloud ambitions, among other things, can also be lumped in here. Either way, the figures from today suggest that the ad/search-business aside, Google's other investments are starting to gain traction. For instance, for Q1 in 2017 Google's other revenues pulled in just over $3 billion. This is in contrast to the just over $2 billion that was announced for the same period the year before. While these figures are nothing in comparison to the $24 billion the company announced in overall revenue, when viewed on its own merit, it is quite telling. Overall revenue climbed $4 billion year-on-year, while the other revenues climbed $1 billion on their own. Taking into consideration the previous year’s figures, this shows the percentage growth for the other revenues is significantly higher than that of the overall revenue. So these other lines of revenue are working and will likely provide further incentive for Google to continue investing in things like hardware and the cloud in the future. If anything, they are now starting to show signs that they could be very lucrative markets for Alphabet and Google outside of their main income routes.
That said, Alphabet’s “Other Bets” is a different story altogether. Since it was formed, this has always been considered the loss-making arm of Alphabet and its grouping as “bets” subtly self-admits that it should be loss-making. However, it seems the loss is not improving. While Other Bets revenues was actually up year-over-year, $244 million for Q1 in 2017 vs $165 million for Q1 in 2016, the operating loss was greater this year. With Alphabet declaring an operating loss of $855 million for Q1 in 2017 compared to the $744 million operating loss declared for Q1 in 2016. So while the revenues increased, so did the overall loss.