Sustaining the ad industry headwinds, will Alphabet enter into Q1 with strong earnings?
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After the Apr. 26th market close, investors will be on the lookout for Alphabet (NASDAQ:GOOG) Q1 earnings which will mainly highlight the company's ad spending by businesses affected by uncertain macro economic conditions.
The consensus EPS Estimate is $25.55 and the consensus Revenue Estimate is $67.8B (+22.6% Y/Y).

Cloud computing and YouTube segment are likely to provide additional depth in its earnings.
Over the last 1 year, GOOG has beaten EPS estimates 75% of the time and has beaten revenue estimates 75% of the time.
Over the last 3 months, EPS estimates have seen 14 upward revisions and 3 downward. Revenue estimates have seen 17 upward revisions and 1 downward.
In the quarter under review, the company made its intelligent data fabric, Dataplex, generally available, which helps customers centrally manage, monitor, and govern data across data lakes, data warehouses and data marts.
Google's ad sales were barely affected by the most recent privacy changes to Apple's iOS, mainly because the company relies on its own Android operating system.

Q4 strength driving Q1 trends:

Alphabet's backlog increased more than 70% to $51B, most of which is attributed to Google Cloud.
In 2022, Google Play's contribution to revenue growth will reflect the fee changes we started to implement in 3Q21.
At the Alphabet level, in Q1, based on current spot rates, the company expects the foreign exchange impact on reported revenues to be a headwind.
In 2022, the company sees a meaningful increase in CapEx wherein in technical infrastructure, servers will again be the largest driver of spend.
Quick look at company's profitability and underlying metrics:


Recent Developments:

Mizuho Securities analyst James Lee as cited by MarketWatch, "Google has generally fared better with stronger-than-expected prices driven by higher offline traffic and a shift to travel that drove up overall search pricing."
Recently, Alphabet announced plans to invest about $9.5B across its U.S. offices and data centers in 2022 compared to $7B in 2021.
In early March, the company agreed to buy cybersecurity firm Mandiant for $23/ share in cash wherein Mandiant will join Google cloud; Recent update: both the companies recently received a request for additional information from the U.S. Justice Department.

Analyst Opinions:

A recent Keybanc report expects another volatile pass through the numbers for internet advertising names, this time with the new macroeconomic pressures and high inflation putting negative pressure on ad budgets; however, it believes that Google and Trade Desk are facing the least negative fundamental impact.
MKM Partners also sees internet giants which includes Google, Meta Platforms facing rough macroeconomic seas ahead and thus it is cutting back on estimates heading into Q1 earnings.
Recent earnings Analysis from our contributors:


Google: Carrying Meta's Headwinds Into Q1 Earnings
Is Google Stock A Buy, Sell or Hold Ahead of Upcoming Earnings?