Alphabet (NASDAQ: GOOGL ) Inc, the parent of Google, beat analysts’ estimates for quarterly revenue on Tuesday and announced a $50 billion share buyback, as a recovering economy and the growing use of online services accelerate their advertising and cloud businesses.
Alphabet shares rose about 4% to $2,375 in after-hours trading on Wall Street.
The results are the first sign that Google services may profit from the spike in usage brought on by lockdowns and other restrictions due to the coronavirus pandemic, which has forced people to shop and communicate online over the past year. .
Google ad sales increased 32% in the first quarter compared to the result of a year ago. Cloud sales rose 45.7%, in line with analyst expectations based on Refinitiv data.
About 17% of people in the United States, Alphabet’s top region by revenue, were fully vaccinated against COVID-19 at the end of the first quarter.
This change coincided with Alphabet’s overall sales rising 34% to $55.3 billion, above analysts’ estimate of $51.7 billion, or 26% growth from the first quarter of last year, when ad sales fell significantly.
Alphabet’s quarterly profit rose 162% to $17.9 billion, or $26.29 per share, beating estimates of $15.88 per share.
The authorization of a share buyback by Alphabet’s board follows a $25 million buyback program announced in 2019.
It’s not immediately clear which industries drove Google’s growth in ad and cloud sales, but that topic was expected to come up when analysts speak with Alphabet executives in a conference call later Tuesday.
The rise in ad buying by travel and entertainment companies is a positive sign, as hotel booking services and movie studios are among the biggest spenders on Google.
Google’s update on efforts to strike long-term cloud computing deals with retailers or businesses that bought services last year might also be interesting.
Google’s new consumer subscription businesses, such as an ad-free version of YouTube, could also catch analysts’ attention.
Alphabet shares have risen 80% in the past year, ranking 184th among companies in the S&P 500 index .