Alphabet, the parent company for Google, reported its first-quarter financial results. The company posted revenue of $20.26 billion, an on-year increase of 17%. Adjusted quarterly net income was $5.25 billion, also below the analysts’ projections but up from the $4.46 billion of the year-ago first quarter. Shares for the tech giant fell 4.9% in trading after hours on Thursday after the results were announced.
CFO Ruth Porat said that “costs associated with operating our data centers including depreciation, (and) content acquisition costs, primarily for YouTube” were behind the higher spending during the period. Even though YouTube was a source of greater cost, Alphabet’s leadership still supports the video and music platform.
“YouTube still has incredible momentum, and we continue to invest heavily here,” said Sundar Pichai, CEO of Google. Pichai added that the service has been successful at generating advertising money from mobile and video, and hoped that original content would help drive interest in its ad-free subscription service YouTube Red.