Google parent Alphabet Inc. (GOOGL) - Get Report  easily beat first-quarter earnings and revenue expectations, but concerns about rising costs may have muted the initial positive reaction of investors. Alphabet shares were up about 0.7% in after-hours trading on Monday as of the time of this article.

Google's earnings per share of $9.93 beat consensus expectations of $9.28, while revenue came in at $31.15 billion, compared to estimates of $30.29 billion.

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Traffic-acquisition costs (TAC) represented 24% of Google's total ad revenue for the quarter, up from 22% a year ago and flat with Q4, and slightly above an analyst consensus of 23.4%. Concerns about rising TAC costs led Alphabet's stock to slump after the company's previous quarterly results were released in February, and may have caused initial gains recorded right after the earnings were released this quarter to be pared as well.  

Alphabet reported that GAAP costs and expenses rose 33% year-over-year to $24.16 billion, outpacing revenue growth of 26%.

The Google Other segment, which covers non-ad revenue streams such as Google Play, hardware and cloud apps/services, saw revenue rise 36% to $4.35 billion, above a $4.26 billion consensus. This was the first quarter in which the revenue for Nest, Google's smart home device division, was counted within the Google Other segment and not its Other Bets group.

However, Google recast its Q1 2017 Google Other numbers to include Nest, so the growth rate involves an apples-to-apples comparison.

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