Dive Brief:
- Google Cloud posted operating income of $191 million on $7.4 billion in revenues, according to Alphabet’s Tuesday Q1 2023 earnings report, for the three-month period ending March 31.
- The gains marked Google Cloud’s first profitable quarter on record. The cloud service provider suffered losses of $706 million during the same period last year.
- Google Cloud has been playing catch-up in the cloud market. It had an 11% share of global cloud spending during the final quarter of 2022, making it the third-largest hyperscaler behind AWS and Microsoft.
Dive Insight:
Google Cloud has been inching toward profitability even as growth slowed in the global cloud market over the last year.
For the final three months of 2022, Google Cloud suffered losses of $480 million, which nearly cut by half the $890 million in operating income losses Alphabet reported for its cloud division in the final three months of 2021.
Alphabet has leaned on search and other Google services to offset losses in its cloud division. The company added Bard to its search engine in February and introduced developer tools powered by the generative AI technology on Friday.
“We are pleased with our business performance in the first quarter, with search performing well and momentum in cloud,” Sundar Pichai, CEO of Alphabet and Google, said in the earnings release.
Alphabet reported revenues of $69.8 billion, up 3% year over year, for the quarter, due in part to “resilience in search and momentum in cloud,” CFO Ruth Porat said.
