Tuesday in CE: Google Q1 Earnings Show Nest Isn't Paying Off, Yet
Alphabet, parent company to Google, has reported their first quarter earnings for 2018 and, despite growing YoY, show a loss for the newly acquired brand Nest. To be clear, there really is no doom and gloom to their earnings report. In fact, Alphabet's $31.15 billion has smashed Wall Street estimates on sales and profits, with steady year-over-year growth over last year's $24.75 billion in the same quarter.
The being said, Nest is a slightly different story. Nest was reorganized back into Google after being a separate subsidiary of Alphabet, allowing their hardware and software team to dedicate more time and resources to the smart home play. It further complimented Google's play to make one cohesive smart home play, something they have strived for between the Pixel and Google Home verticals.
So to look at how that pays off, you need to compare the "Other Bets" section of Alphabet to the standard Google revenue line item because Nest was separate entity when casting the earnings report. That "Other Bets" section is the reason Alphabet was formed, as it allows the company to invest in technologies like self-driving cars without damaging Google's reputation or cash flow.