April 23 (UPI) -- Alphabet's net profit increased 73 percent in the first quarter of 2018, an earnings report released Monday indicates.
The Google parent company's net profit rose to $9.4 billion, up from $5.4 billion in the first quarter of 2017, after receiving a boost from a change in accounting rules which required the company to report the current fair value of non-marketable securities.
As a result of the rule, Alphabet reported a $3 billion gain on equity securities from its investments in companies such as Uber.
Google's advertising business garnered $26.64 billion in revenue for the first quarter, while other revenues such as its cloud business and hardware sales reached nearly $4.4 billion.
Google properties, such as its search engine and YouTube video platform, earned $22 billion and saw an 8 percent year-over-year increase in paid clicks on its ads.
Alphabet's Network Members' properties, including third-party sites, brought in $4.6 billion in revenue after its impressions increased 5 percent year-over-year and its cost-per-impression decreased 10 percent year-over-year.
Google's total traffic acquisition costs, the amount it pays partners such as Apple to direct smartphone users to its search engine, increased 22 percent from the first quarter of 2017 to $6.28 billion.
During an earnings call Chief Financial Officer Ruth Porat said the rise in cost was due to an increase in fees for mobile search and so-called programmatic ads, in which Google places ads on partners' content.
Alphabet's operating expenses were $10.7 billion, up 27 percent year-over-year, while its capital expenditures tripled from the first quarter in 2017 to $7.7 billion.
Porat said the increase in operating expenses was primarily due to research and development.