Ad sales at Google slowing as Q3 profits fall at parent company Alphabet Inc
Google’s parent company, Alphabet Inc. has released its financial results for the quarter that ended 30 September 2022, showing a third-quarter net income of $13.91 billion (AU$21.76 billion).
The California-based company said it had a net income of $1.06 (AU$1.66) per share. It posted revenue of $69.1 billion (AU$108 billion) in the period.
Alphabet and Google CEO, Sundar Pichai, CEO said: “We’re sharpening our focus on a clear set of product and business priorities. Product announcements we’ve made in just the past month alone have shown that very clearly, including significant improvements to both Search and Cloud, powered by AI, and new ways to monetise YouTube Shorts. We are focused on both investing responsibly for the long term and being responsive to the economic environment.”
Alphabet and Google CFO, Ruth Porat, said: “Our third quarter revenues were $69.1 billion (AU$108 billion), up 6% versus last year or up 11% on a constant currency basis. Financial results for the third quarter reflect healthy fundamental growth in Search and momentum in Cloud, while affected by foreign exchange. We’re working to realign resources to fuel our highest growth priorities.”
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Despite the company’s dominance in search advertising, Alphabet reported earnings and revenue below analysts’ expectations, showing the search advertising giant is susceptible to market slowdowns.
According to Bloomberg projections, Alphabet’s third-quarter sales, excluding payments to distribution partners, came in at $57.27 billion (AU$89.59 billion), short of analyst projections of $58.18 billion (AU$91.01 billion).
In the Google Ad segment of the company, Alphabet reported revenues of $39.54 billion (AU$61.85 billion) from its Search division, $7.07 billion (AU$11.06 billion) from YouTube ads, and $7.87 billion (AU$12.31 billion) from its Google Network division.
Google Ad revenue rose to $54.48 billion (AU$85.22 billion) from $53.13 billion (AU$83.11 billion) last year, despite lower YouTube and Network revenue.
For the third quarter, Google’s Other revenue increased from $6.75 billion (AU$10.56 billion) to $6.9 billion (AU$10.79 billion). Revenue from Google Cloud was $6.87 billion (AU$10.75 billion) in the third quarter, an increase over $4.99 billion (AU$7.81 billion) last year.
Alphabet Inc. currently trades at $104.48 (A$163.43) as of 21 October 2022 and has a market capitalisation of $1.37 trillion (A$2.14 trillion).
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