Google parent company Alphabet announces financial results for the third quarter of 2022, sales of advertising & search are strong, but YouTube sales decrease for the first time in two years

Alphabet, Google's parent company, has announced its financial results for the third quarter of 2022 (July-September). While Alphabet's total sales have increased slightly, YouTube's sales have declined, highlighting the company's struggles to compete with TikTok as a short-video platform.

GOOG Exhibit 99.1 Q3 2022 - 2022Q3_alphabet_earnings_release.pdf
(PDF file)

Alphabet Q3'22 Earnings Call-YouTube

Alphabet (GOOGL) Q3 2022 earnings

Alphabet third quarter results fall as giant struggles to compete with TikTok | Alphabet |

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According to Alphabet, total sales in the third quarter of 2022 increased 6% year-on-year to $69.092 billion (approximately ¥10.25 trillion), with analysts reporting $70.9 billion (approximately ¥10.5 trillion). ) was below the estimate. Operating income decreased by 19% year-on-year to $ 17.135 billion (about 2.66 trillion yen), net income decreased by 27% year-on-year to $ 13.91 billion (about 2.6 trillion yen) is.

The breakdown of total sales is as follows: 'Google Search & other', which constitutes 'Google Advertising', increased by 4% year-on-year to 39.539 billion dollars (about 5.87 trillion yen), ``YouTube ads'' decreased 2% year-on-year to $ 7,071 million (about 1.5 trillion yen), and ``Google Network-related'' decreased 2% year-on-year $ 7,872 million (about 1,170 billion yen). 'Google other (Google other)' increased by 2% year-on-year to $ 6.895 billion (about 1.2 trillion yen), 'Google Cloud related (Google Cloud)' increased by 38 from the same period last year 6,868 million dollars (about 1.2 trillion yen), an increase of 15%, 'Other Bets', which summarizes ventures and unlisted companies invested by Alphabet such as Waymo and Verily, increased by 15% to 209 million US dollars (about 31 billion yen), investment 'Hedging gains' increased by 1000% year-on-year to 638 million dollars (about 95 billion yen). 'Number of employees' was 186,779, an increase of about 36,000 from the same period last year.

The breakdown of the operating profit of 17,135 million dollars is that 'Google Services', which includes Google advertising, Google search-related, YouTube advertising, Google's network-related, and Google's other businesses, decreased by 17% year-on-year to 19,781 million. The only surplus in the dollar (about 2.93 trillion yen). Google Cloud has a deficit of $ 699 million (about 100 billion yen), Other Bets has a deficit of $ 1,686 million (about 250 billion yen), and unallocated corporate costs (unallocated) of $ 336 million (approximately 50 billion yen).

``Alphabet is also suffering from worsening macroeconomic headwinds, including inflation spikes and recession concerns,'' said Jesse Cohen, senior analyst at . In addition, Alphabet's CEO Sundar Pichai said, ``We are focusing on a clear set of products and business priorities,'' which includes YouTube under the umbrella of Alphabet creating YouTube shorts in preparation for competition with TikTok. It seems to refer to monetization and embarking on improvements to the search and cloud departments.

Regarding the decline in YouTube ad sales, Cohen said, ``Google's slump in quarterly results worsens, even though YouTube is considered one of the most isolated companies in the advertising space compared to its peers. and the latest signs that a challenging macroeconomic environment is pushing advertisers to cut spending.'

Alphabet announced in August 2022 that it will delay hiring in some departments. “The impact of the cutback in hiring will not be apparent until 2023,” Ruth Porat, the company's CFO, said on a conference call with investors. In fact, the number of employees increased by about 13,000 in the third quarter of 2022, and about half of that number is expected to increase in the fourth quarter of 2022. Porat said, ``Even though headcount growth will slow in 2023, we will continue to recruit for key roles, with a particular focus on top talent in engineering and technology.'' , and some hiring activities will continue.

The company's stock price fell by more than 5% following Alphabet's earnings announcement.

in Note, Posted by logu_ii