Alphabet, the world's largest provider of search and video advertisements, dropped more than 4.3 per cent in extended trading after it reported weaker than expected earnings for the first quarter.
The company reported a net profit of more than $16.4 billion in the three months ending on March 31, nearly 8.3 per cent down on an annual basis. It was 20.3 per cent or $4.2bn less on a quarterly basis.
Revenue at Google’s parent company during the period rose almost 23 per cent annually to more than $68bn. But it was 9.7 per cent down compared to the quarter that ended on December 31.
The company’s stock was trading at $2,270 a share in after-hours trading.
“Q1 saw strong growth in search and cloud, in particular, which are both helping people and businesses as the digital transformation continues,” said Sundar Pichai, chief executive of Alphabet.
“We will keep investing in great products and services … and creating opportunities for partners and local communities around the world."
Google services business — which includes advertisements, Android, Chrome, hardware, Maps, Search, Google Play and YouTube — accounted for more than 90 per cent of the company’s total sales.
It added more than $61.4bn to overall revenue, almost 20.1 per cent more than the first quarter of 2021.
Google’s advertising revenue from Search, YouTube and other businesses increased 22.3 per cent yearly to more than $54.6bn in the first quarter.
The total revenue from the cloud business grew an annual 43.8 per cent to more than $5.8bn.
Alphabet said its operating loss in the cloud segment reached $931 million during the quarter, which narrowed from a $974m loss in the same period in 2021.
Google Cloud includes the company’s infrastructure and data analytics platforms, collaboration tools and other services for enterprise customers.
It generates revenue mainly from fees received for cloud platform services and workspace collaboration tools.
This month, Google announced it would invest about $9.5bn in its US offices and data centres this year as it seeks to get more employees back into its buildings as Covid-19 restrictions ease.
The company aims to create 12,000 jobs as part of the investment.
The California-based company’s revenue from other investments, or subsidiaries, increased more than 120 per cent yearly to $440m.
Other bets are derived mainly through the sale of internet offerings, as well as licensing and research and development services.
This includes Alphabet’s X lab, self-driving unit Waymo and other non-Google companies.
Alphabet spent more than $9.1bn on research and development, nearly 13.4 per cent of its total sales in the first quarter. It was 21.8 per cent more than the R and D expenditure of the same period in 2021.
“We are pleased with Q1 revenue growth of 23 per cent," chief financial officer Ruth Porat said.
"We continue to make considered investments in capex [capital expenditure], R&D and talent to support long-term value creation for all stakeholders."
YouTube added more than $6.8bn to Alphabet’s total revenue, surging more than 14.3 per cent annually.
Google’s total acquisition costs stood at nearly $11.99bn, up 23.5 per cent on an annual basis. It exceeded analysts’ expectations of $11.69bn.
TACs are payments that search companies make to affiliates and online companies for bringing traffic to their websites. It is a major source of expenses for companies such as Google and Yahoo.
Alphabet’s total cash, cash equivalents and marketable securities reached more than $133.9bn at the end of last year, a year-on-year drop of more than 4 per cent.
Alphabet, which employs 163,906 people globally, earned almost 46.6 per cent of its first quarter revenue or more than $31.7bn from the US market.
In Europe, the Middle East and Africa, the company earned more than $20.3bn or 30 per cent of its total sales.
In the last quarter, Alphabet’s earnings for each share dropped 6.4 per cent yearly to 24.62, missing analysts’ estimates of $25.91.
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
Sholto Byrnes on Myanmar politics
MATCH INFO
Champions League quarter-final, first leg
Tottenham Hotspur v Manchester City, Tuesday, 11pm (UAE)
Matches can be watched on BeIN Sports
World Cup final
Who: France v Croatia
When: Sunday, July 15, 7pm (UAE)
TV: Game will be shown live on BeIN Sports for viewers in the Mena region
Golden Shoe top five (as of March 1):
Harry Kane, Tottenham, Premier League, 24 goals, 48 points
Edinson Cavani, PSG, Ligue 1, 24 goals, 48 points
Ciro Immobile, Lazio, Serie A, 23 goals, 46 points
Mohamed Salah, Liverpool, Premier League, 23 goals, 46 points
Lionel Messi, Barcelona, La Liga, 22 goals, 44 points
UAE v Gibraltar
What: International friendly
When: 7pm kick off
Where: Rugby Park, Dubai Sports City
Admission: Free
Online: The match will be broadcast live on Dubai Exiles’ Facebook page
UAE squad: Lucas Waddington (Dubai Exiles), Gio Fourie (Exiles), Craig Nutt (Abu Dhabi Harlequins), Phil Brady (Harlequins), Daniel Perry (Dubai Hurricanes), Esekaia Dranibota (Harlequins), Matt Mills (Exiles), Jaen Botes (Exiles), Kristian Stinson (Exiles), Murray Reason (Abu Dhabi Saracens), Dave Knight (Hurricanes), Ross Samson (Jebel Ali Dragons), DuRandt Gerber (Exiles), Saki Naisau (Dragons), Andrew Powell (Hurricanes), Emosi Vacanau (Harlequins), Niko Volavola (Dragons), Matt Richards (Dragons), Luke Stevenson (Harlequins), Josh Ives (Dubai Sports City Eagles), Sean Stevens (Saracens), Thinus Steyn (Exiles)
LILO & STITCH
Starring: Sydney Elizebeth Agudong, Maia Kealoha, Chris Sanders
Director: Dean Fleischer Camp
Rating: 4.5/5
Packages which the US Secret Service said contained possible explosive devices were sent to:
- Former first lady Hillary Clinton
- Former US president Barack Obama
- Philanthropist and businessman George Soros
- Former CIA director John Brennan at CNN's New York bureau
- Former Attorney General Eric Holder (delivered to former DNC chair Debbie Wasserman Schultz)
- California Congresswoman Maxine Waters (two devices)
Tips for avoiding trouble online
- Do not post incorrect information and beware of fake news
- Do not publish or repost racist or hate speech, yours or anyone else’s
- Do not incite violence and be careful how to phrase what you want to say
- Do not defame anyone. Have a difference of opinion with someone? Don’t attack them on social media
- Do not forget your children and monitor their online activities
