Financially speaking, Alphabet is having a good year. On Monday, Alphabet Inc. (NASDAQ: GOOG, GOOGL) announced its financials for the first quarter of 2018, including total revenue of $31.1 billion, a 26 percent increase year-over-year, and operating income of $7.0 billion, a 22 percent increase year-over-year. Net income for the quarter was solid at $9.4 billion, or $9.93 earnings per share, beating analyst predictions.

Google advertising revenue of $26.6 billion represents 85.5 percent of total revenue, an increase of close to 20 percent year-over-year. The company’s expenses (cost of revenue, R&D, sales and marketing, and general and administrative) also increased for the quarter, jumping from $18.1 billion for the fourth quarter of 2017 to $24.1 billion for the first quarter of 2018. The California-based company reported total assets of $206.9 billion as of March 31.

‘Our ongoing strong revenue growth reflects our momentum globally, up 26 percent versus the first quarter of 2017 and 23 percent on a constant currency basis to $31.1 billion. We have a clear set of exciting opportunities ahead, and our strong growth enables us to invest in them with confidence,’ said Ruth Porat, CFO of Alphabet and Google, in a news release.

In the company’s earnings call, CEO Sundar Pinchai mentioned the Google News Initiative which officially launched in March.

‘Over the years, we have worked closely with the news industry to address key challenges to projects like Accelerated Mobile Pages. We are building on that partnership with a $300 million investment to elevate and strengthen quality journalism. As part of this effort, we announced more than a dozen new products, including Subscribe with Google, developed in close collaboration with publishers which lets you use your Google account to buy a subscription on participating news sites,’ said Pinchai.

‘We’ve had overwhelming interest. Since the launch, we have heard from more than 300 news publishers who are interested in Subscribe with Google. We also introduced new tools for journalists and improvements to our platforms to ensure that we are surfacing accurate, quality content where it matters most,’ Pinchai added.

Pinchai also addressed the General Data Protection Regulation which goes into effect in the European Union on May 25. Because GDPR does business in the EU, and it gathers data on residents and businesses within EU, Google will be impacted.

‘GDPR, I realize, is a fairly new public topic, but for us it’s not new,’ Pinchai said. ‘We started working on GDPR compliance over 18 months ago. It’s really important, and we care about getting it right.’

Despite the solid Q1 financials, investors were not impressed with Alphabet’s results. On April 23, the day the company released its first quarter report, stock was valued at $1,073.81 per share. As of 5:17 EDT today, stock was valued at $1,022.64 per share, a drop of $51.17 per share.

Insider Take:

According to CNBC, Google stock may have dropped because analysts are saying that Google will be less profitable in the second quarter due to significant investments and lower margins. Other considerations may also be at play, including concerns over privacy regulations like GDPR and possible regulation in the U.S. following the Facebook-Cambridge Analytica revelation that personal data has been misused.

Another potential factor for investor discontent may be the continued controversy concerning Google’s handling of YouTube ad spots. Despite the company’s commitment to remove objectionable content and ads, last week, CNN revealed that ads from more than 300 companies like Netflix, Amazon, Adidas and Hershey were run on YouTube channels that promoted white nationalists, Nazis, pedophilia and other objectionable content. In other words, Google’s may have solid financials, but it also has plenty of challenges, and those challenges may be making investors a little nervous.