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  • Marijan Hassan - Tech Journalist

Google Cloud records profits for the first time since launching

Google Cloud is a heavyweight in the Cloud market but interestingly, the company hasn’t made any profits until this year. The company announced that in the quarter ending March 31, it won $7.4 billion of revenue and produced an operating income of $191 million. That’s a 2.5 percent profit.

It’s not what you would expect from the trillion-dollar company but it’s a step in the right direction, especially considering that in the year-ago quarter, the unit reported a $706 million loss on $5.82 billion in revenue. In comparison, Amazon Web Services won $80 billion of revenue in 2022, producing an operating income of $22.8 billion to mark a 28 percent profit. However, it should be noted that AWS was established in 2000 and only became profitable in 2014.

The Google Cloud unit includes the Google Cloud Platform, which rents out cloud infrastructure and services that companies can use to build and run their own applications, as well as Google Workspace productivity software subscriptions. Together, this accounts for about 10% of Alphabet’s total revenue.

Speaking on the matter, CEO Sundar Pichai said in the report that search has increased on the platform which has created momentum in Cloud. “We introduced important product updates anchored in deep computer science and AI. … We see huge opportunities ahead, continuing our long track record of innovation,” he said.

The announcement comes barely three months after Google announced plans to lay off 12,000 employees over economic uncertainties. Pichai said that the company had hired in surplus over the last few years and that the layoffs would allow the company to shift its focus to its core business model and invest more in AI.

While the layoffs and reduced office space resulted in $2.6 billion in charges, the first quarter of this year still showed an increase of 3% in year-over-year revenue, according to the Q1 earnings report. Alphabet and Google’s CFO Ruth Porat said in the report that the company’s “resilience in Search and momentum in Cloud” had resulted in the increased consolidated revenue last quarter, marking a 6% increase in constant currency.


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