Alphabet's stock sank after Q1 revenues missed Wall Street targets (GOOG, GOOGL)

Sundar Pichai

Alphabet, the parent company of the internet search giant Google, fell short of Wall Street's revenue targets for its first three months of the year.
The stock was down over 7% in after-hours trading on Monday.
A slowdown in Google's ad revenue could be the reason for the missed targets.
Google's ad revenue grew by only 15% year over year in Q1 2019, compared to over 24% year over year growth rate in Q1 2018.
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Alphabet, the parent company of the internet search giant Google, fell short of Wall Street's revenue targets for its first three months of the year, and the stock was down over 7% in after-hours trading on Monday.

"We delivered robust growth led by mobile search, YouTube, and Cloud with Alphabet revenues of $36.3 billion, up 17% versus last year, or 19% on a constant currency basis," Ruth Porat, the chief financial officer of Alphabet and Google, said in a statement on Monday.

A slowdown in Google's ad revenue could be the reason for the missed targets. Google's ad revenue grew by only 15% year over year in Q1 2019, compared to over 24% year over year growth rate in Q1 2018.

"The timing of product changes in ads at times can have an impact on year-on-year growth rates," Porat said during Monday's earnings call. "We will continue to make changes with a focus on the long-term best interest of users and advertisers."

Here's what Alphabet reported:

Net Revenue (excluding TAC): $29.48 billion, up 18.6% year over year, but below the $30.04 billion that analysts expected.

Q1 EPS (GAAP): $9.50 (including a $1.7 billion EU fine), compared with $10.10 expected by analysts.

Other bets revenue: $170 million, compared with $150 million last year.

Other bet operating loss: ($868) million versus ($571) million last year.

Traffic acquisition costs (TAC): $6.86 billion, or 22% of advertising revenue, compared with 24% of advertising revenue during last year.

Google's capital expenditure: $4.6 billion, compared with $7.3 billion during the same period last year.

Employees: 103,459, adding more than 4,600 employees to its payroll in the first quarter.

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