Alphabet reported first-quarter results on Tuesday that exceeded analysts’ estimates. The stock jumped over 4% before paring its gains.

The company also said its board authorized a $70 billion share buyback.

Here are the key numbers:

• Earnings: $1.17 per share vs. $1.07 per share expected, according to Refinitiv.
• Revenue: $69.79 billion vs. $68.9 billion expected, according to Refinitiv.

The beat on the top and bottom lines breaks a string of four straight quarters in which the company missed consensus estimates.

• YouTube advertising revenue: $6.69 billion vs. $6.6 billion, according to StreetAccount.
• Google Cloud revenue: $7.45 billion vs. $7.49 billion, according to StreetAccount.
• Traffic acquisition costs (TAC): $11.72 billion vs. $11.78 billion, according to StreetAccount.

Alphabet’s revenue rose 3% to $69.79 billion from $68 billion a year earlier, according to the earnings report. The company is mired in a multi-quarter stretch of low single-digit revenue growth after almost two decades of consistent and rapid expansion. With fears of a recession building since last year, advertisers have been reeling in online marketing budgets, wreaking havoc on Google, Facebook and others.

On its investor call, finance chief Ruth Porat said due to the challenging economic environment “the outlook remains uncertain.”

Ad revenue beat analyst expectations, but fell from the year prior to $54.55 billion. YouTube ad revenue stayed in line with analyst expectations, also declining from a year ago.

In addition to the overall pullback in ad spending, YouTube is also facing heightened competition from TikTok in short-form videos.

To grapple with the recent advertising weakness, Google has had to make its most extreme cuts in its company history, including laying off 12,000 employees — about 6% of its workforce in January. This month, CFO Ruth Porat announced “multi-year” cuts to things like real estate, employee services and equipment.

Alphabet reported $2.6 billion in charges related to the layoffs and office space reduction during the quarter.

Net income fell to $15.05 billion, or $1.17 per share, from $16.44 billion, or $1.23 per share.

Google is finally generating a profit in its cloud-computing business, which competes with Amazon and Microsoft. The unit recorded operating income of $191 million in the quarter, following a $706 million loss a year ago.

Revenue in Other Bets, which includes Google’s life sciences unit Verily and self-driving car company Waymo came in at $288 million, down from $440 million a year ago. The company previously said starting in the first quarter, artificial intelligence subsidiary DeepMind will no longer be reported in Other Bets, but will be reported as part of Alphabet’s corporate costs.

Google’s Search and Other revenue came in at $40.36 billion, up slightly from $39.62 billion a year ago.

Google is feeling pressure from the popularity of AI-based chatbot ChatGPT, launched late last year by Microsoft-backed OpenAI. The company quickly launched its own AI chatbot called Bard during the quarter.

A recent Times report that showed Samsung is reportedly considering changing its default search engine from Google to Microsoft’s Bing for its lineup of smartphones sent Google shares falling more than 3.5% last week.

An investor on Tuesday’s call asked Pichai how he feels about its partnerships with makers like Samsung and Apple, which is reportedly up for renewal this year, in light of Microsoft’s ambitions with Bing.

Pichai answered that it’s always been in a competitive environment for the deals it has but that “it all starts with continuing to innovate and improve in search and make sure we’re leading there,” he said, emphasizing the word “leading.”

Pichai added that he’s “comfortable” that Google will continue to improve search to be competitive for such deals. Google currently holds more than 90% of search market share.

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