Alphabet Q1 earnings top estimates amid advertising sales resurgence

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Alphabet (GOOGL), the parent company of Google, reported first-quarter results that easily exceeded estimates, with the tech giant's results getting a boost from a pick-up in its advertising business amid the vaccine-led recovery. Shares climbed more than 4.5% in late trading following the report.

Here's what Wall Street expects to see from Alphabet's results:
Q1 Revenue, excluding traffic acquisitions costs: $45.6 billion vs. $42.6 billion expected and $33.71 billion year-over-year
Q1 GAAP earnings per share: $26.29 vs. $15.64 expected and $10.79 year-over-year

Of all of the Big Tech "FAANG" stocks, Alphabet's shares posted the least impressive gain during 2020, despite the broader trend toward tech outperformance last year. The company's results have been viewed as closely tied to the pace of the post-pandemic economic reopening. Alphabet's core advertising revenue through search and YouTube is exposed to marketers in travel and other high-contact industries, as well as small businesses deeply impacted by the pandemic.

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This exposure served the company well in the first quarter, with a pick-up in ad sales helping fuel Alphabet's overall 35% jump in top-line results, excluding traffic acquisition costs of $9.7 billion. Google advertising revenues surged 32% to $44.6 billion, continuing to comprise the vast majority of overall revenues for the company. YouTube ad sales rose by a greater-than-expected 49% to more than $6 billion.

"Total revenues of $55.3 billion in the first quarter reflect elevated consumer activity online and broad based growth in advertiser revenue," Alphabet Chief Financial Officer Ruth Porat said in a press statement, referring to the company's total revenue excluding traffic acquisition costs. "We’re very pleased with the ongoing momentum in Google Cloud, with revenues of $4.0 billion in the quarter reflecting strength and opportunity in both GCP [Google Cloud Platform] and Workspace."