Alphabet Misses on Earnings But Ad Revenue Better Than Expected

Image: Ahmed Shabana via Unsplash
Google advertising revenue rose nearly 12% in the quarter to $56.29 billion, beating expectations of $55.89 billion, according to FactSet.

Google parent company Alphabet has reported weaker-than-expected earnings and revenue for the second quarter. Despite the latest earnings report the stock is currently up nearly 5% in extended trading.

The company reported around $16 billion in profit during its second quarter of 2022, which is down from $18.5 billion during the same period last year.

Rising expenses played a part in the second quarter as the company actually brought in more revenue than it did in Q2 2021 at $69.7 billion, up from last year’s $61.9 billion. However, spending was around $3 billion more on both research and development and sales and marketing.

 
 

“Google Search & other” ads brought in almost $40.7 billion, while Google’s Cloud business made around $6.2 billion in revenue and YouTube advertising around $7.3 billion.

Google Cloud, which aims to take share from Amazon Web Services and Microsoft Azure lost $858 million during the quarter.

Revenue growth slowed to 13% in the quarter down from 62% a year earlier amidst the post-pandemic reopening when consumer spending was on the rise.

 
 

Though previously saying that hiring would slow, Alphabet’s headcount rose 21% to 174,014 full-time employees from 144,056 the year prior.

“In the second quarter our performance was driven by Search and Cloud,” said Sundar Pichai, CEO of Alphabet and Google.

“The investments we’ve made over the years in AI and computing are helping to make our services particularly valuable for consumers, and highly effective for businesses of all sizes. As we sharpen our focus, we’ll continue to invest responsibly in deep computer science for the long-term.”

Highlights

  • Earnings per share (EPS): $1.21
  • Revenue: $69.69 billion
  • YouTube advertising revenue: $7.34 billion
  • Google Cloud revenue: $6.28 billion
  • Traffic acquisition costs (TAC): $12.21 billion

The Staff

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