Alphabet beats Q1 earnings expectations

Alphabet delivered $20.17 billion in revenue excluding traffic acquisition costs.

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Google parent company Alphabet reported first quarter financial results Thursday that came in above estimates.

The tech giant reported non-GAAP earnings were $7.73 per share on a revenue of $24.8 billion, up 22 percent year-over-year, when including traffic acquisition costs (TAC).

Wall Street was looking for earnings of $7.40 per share with $24.2 billion in revenue.

Net revenue excluding TAC was expected to be $19.81 billion.

Alphabet delivered $20.17 billion in revenue excluding TAC. Net income was $5.43 billion.

Google revenues made up the bulk of Q1 sales with $24.5 billion in revenue, down slightly from $25.8 billion the previous quarter. The Google umbrella covers the company's enterprise cloud, software and data management products. The biggest contributor was mobile growth, said Alphabet CFO Ruth Porat.

Porat also said the Google cloud platform is one of fasted growing businesses across Alphabet.

The company's total advertising revenue was $21.4 billion. Aggregate cost-per-click fell 19 percent, but aggregate paid clicks were up 44 percent compared to the same quarter a year ago.

In the Other Bets category, which houses Waymo, Nest, Fiber, Alphabet's healthcare-driven initiatives and other speculative projects, Alphabet posted revenue of $244 million over the quarter, with operating losses of $855 million. Last quarter, losses in this category totaled $1.1 billion. Porat said Nest, Verily and Fiber drove most of the Other Bets revenue in Q1.

On the conference call, Google CEO Sundar Pichai once again highlighted the company's work around machine learning and artificial intelligence.

"Advances in machine learning are helping us make many Google products better," Pichai said. "We continue to set the pace in machine learning and AI usage."

Looking forward toward the second quarter, Wall Street is expecting non-GAAP earnings of $8.05 per share with $25.3 billion in revenue.

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