Tech

Google's capital expenditures tripled from a year ago

Key Points
  • Google parent Alphabet beat Wall Street estimates in its earnings report Monday, posting revenue of $31.15 billion compared with $30.29 billion expected.
  • Capital expenditures for Alphabet's Google division totaled $7.669 billion for the first quarter of 2018.
  • Analysts had expected just $3.5 billion in capital expenditures for all of Alphabet's divisions.
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Google's capital expenditures tripled in the first quarter of 2018 from the same period the year before, more than doubling analyst estimates.

Google parent Alphabet beat Wall Street estimates in its earnings report Monday, posting revenue of $31.15 billion compared with $30.29 billion expected.

And the search engine giant certainly appears to be spending money to make money.

Capital expenditures for Alphabet's Google division totaled $7.669 billion for the first quarter of 2018.

Sundar Pichai
Bloomberg | Getty Images

That's triple expenditures from the same period in 2017, when Google posted expenditures of $2.409 billion, and double expenditures for the fourth quarter of 2017, when Google spent $3.805 billion.

The spike demonstrates the company's "commitment to growth," CFO Ruth Porat said on the earnings call.

Analysts had expected just $3.5 billion in capital expenditures for the first quarter for all of Alphabet's divisions.

Data centers and other facilities represented a key driver of costs, Porat said. Google also completed a $2.4 billion purchase of New York's Chelsea Market last month.

"Our facilities spend in Google, dominated by the Chelsea Market acquisition, reflects that we favor owning rather than leasing real estate when we see good opportunities," Porat said. "We are also investing in data center growth and increased network capacity through undersea cables."

Content acquisition for YouTube and hardware-related costs also drove expenditures up, Porat said.

— CNBC's Jordan Novet contributed to this report.

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