If the economy is heading towards a recession, Google doesn’t feel that way.
Or at least I didn’t feel it until March 31st.
The internet search giant reported strong Q1 Results On Thursday, the company sent 5% shares after opening hours as key advertising and cloud businesses brought healthy growth. However, these results apply to the first calendar quarter of the year, just before the world trade war that Trump took over began in earnest.
Google has not said about the business conditions Google is currently experiencing. The executives at the Google-Parent Company’s Alphabet have remained disciplined silence about what happened in the current quarter about Thursday’s revenue call, despite analysts’ efforts to get the update.
“It’s really too early to comment,” Chief Business Officer Philip Schindler said in response to one such question.
“We are clearly not immune to the macro environment, but we don’t want to speculate about the potential impact,” Schindler said. (One of Schindler’s information was willing to share the disposal of the so-called de-Minimis shipping exemptions that Chinese retailers like Shein and Temu rely on.
After weeks of disruption in the market, particularly Google’s various concerns, the company’s strong first-quarter report card had plenty of reason to celebrate on Thursday with news that it would buy back a penny share and another $70 billion in shares.
Google increased its 12% year-on-year topline to $900.2 billion in the first quarter, breaking the average analyst’s expectation of $89.2 billion, earnings per share of $2.81, at $2.01, as Wall Street predicted. The company has given growth to strong demand from advertisers in the financial industry, insurance, healthcare and retail.
Revenue from ads on video site YouTube rose 10% to $8.9 billion from the previous year, while Google’s cloud business rose 28% to $12.3 billion.
Alphabet CEO Sundar Pichai has promoted profits in its AI initiatives, including the deployment of an “AI Overview” that is deployed across Google’s search services. The company reaffirms its previously announced plans to spend $75 billion on capital expenditures on cloud and AI infrastructure this year, indicating it remains bullish on AI businesses.
Many dangers Google faces
It’s a difficult time for the alphabet. Entering Thursday’s earnings report, the company’s stock has slipped around 15% so far this year, more than the decline the NASDAQ or S&P 500 has suffered.
Alphabet’s business faces serious risks in multiple ways as economic uncertainties in Trump’s tariffs put pressure on core advertising businesses and a surge in powerful new AI models threatens to disrupt the dominance of internet search.
The court lawsuits and regulators facing Alphabet were not mentioned during the revenue call Thursday. This is from the fast-growing YouTube subscription business to self-driving Waymo vehicles, as it highlights the progress of various products from management.
The fact that Alphabet historically does not provide detailed “guidance” predictions on revenue calls gives some coverage to avoid elephants in the room.
Advertising accounts for roughly three-quarters of the alphabet’s revenue, so the health of the global advertising market will be important over the coming months. Advertising and marketing budgets are usually one of the first costs businesses have cut in the economic downturn, and many economists and investors are concerned about the possibility of a recession, as there is uncertainty about tariffs.
If Google’s business really fell off the cliff in April, the company may have felt it had an obligation to give at least some kind of warning. The fact that Google remains a mother could be interpreted as an implicit indication of self-confidence. And while Schindler avoided questions about business terms in April, he hinted at the comparison resilience of Google’s experience in previous economic recessions and search ads compared to other types of ads.
“To zoom out,” Schindler said, “I’d say there’s a lot of stuff and experience going on after an uncertain time.”
This story was originally featured on Fortune.com.
