Can Google's 'Other Revenues' Lift Alphabet In Q1?

Google parent Alphabet Inc.’s GOOGL first quarter financial results could have an outsized impact on the rest of the tech industry, when it reports on Monday afternoon. This means investors will want to pay close attention, especially considering that some of Alphabet’s newer business units could help drive Q1 growth.

Alphabet’s Q1 earnings are expected to surge by 19.2% to reach $9.21 per share, based on our current Zacks Consensus Estimates. The company’s overall Q1 revenues are projected to pop by 20.7% to hit $24.29 billion. Investors should note that our revenue estimate excludes Google Network Members revenues.

Google’s advertising business is once again expected to account for a large portion of quarterly revenues. But Alphabet has also slowly diversified across different industries, from AI to cloud computing, in order to grow both its top and bottom lines.

Therefore, investors need to know how Alphabet’s newest business units are expected to perform in the first quarter.

To answer this, we can turn to our exclusive non-financial metrics consensus estimate file. The Zacks Consensus NFM file contains detailed estimate data for business segment metrics and non-financial metrics reported by companies. The data is acquired from digest and contributing broker models and includes the independent research of expert stock market analysts.

One of Alphabet's most promising growth catalysts is its “Google other revenues” category, which is made up of the Google Play Store, Google Cloud offerings, and its hardware initiatives. Investors might remember that Alphabet debuted its new line of Google-branded hardware devices, including the Pixel phone and Google Home smart speaker, in 2016. Since then, the company has bolstered this other revenues segment.

With that said, our consensus estimate file is calling for Google other revenues to hit $4.32 billion, which would mark about 39.5% growth from the year-ago period. Last quarter, this unit surged by 37.9% to reach $4.69 billion. Investors should note that the expected sequential downturn is likely due to increased holiday period sales.

It is also worth noting that Google other revenues are separate from Alphabet’s mysterious "Other Bets" unit, which it uses to lump together smaller projects that have yet to generate much revenue.

For more estimates ahead of Alphabet’s Q1 report, check out: 3 Key Estimates for Google's Q1 Earnings Report.

Also, make sure to check back here for our full analysis of Alphabet’s actual results!

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