Alphabet’s Q2 2022 earnings below expectations as Google slows hiring
What do you want to know
- Alphabet announced its financial results for the second quarter of 2022 on Tuesday.
- The company posted 13% year-over-year growth, down significantly from last year’s 62% growth in the same quarter.
- Google recently announced it was slowing hiring for the rest of the year with a temporary two-week break.
Google’s parent company Alphabet announced its second-quarter 2022 financial results on Tuesday, reporting $69.69 billion in revenue. This is a 13% year-over-year growth from the same quarter in 2021, although a steep decline from the 62% growth seen in this quarter.
Due to slowing growth, the company missed analysts’ expectations of $69.9 billion (via CNBC). YouTube, often a bright spot for the company, also missed analysts’ projections, grossing $7.34 billion versus $7.52 billion expected. This is likely due to increased pressure from competing apps like TikTok, signaling a shift in the market that sees younger consumers using the popular app as a search tool.
Meanwhile, Google Cloud continues to lose money, but revenue continues to grow compared to the previous quarter and the same quarter last year. That said, it still narrowly missed revenue expectations for the quarter, with $6.28 billion reported versus $6.41 billion expected.
“In the second quarter, our performance was driven by search and cloud,” Sundar Pichai, CEO of Alphabet and Google, said in a statement. “The investments we’ve made over the years in artificial intelligence and computing help make our services uniquely valuable to consumers and highly effective for businesses of all sizes. As we refine our focus , we will continue to invest responsibly in deep computing science for the long term.”
In terms of sharpening its priorities, the company recently announced that it is slowing hiring for the rest of the year as it focuses on “streamlining processes.” Part of that slowdown involves a two-week hiring pause allowing teams to “prioritize their roles and hiring plans.”
Jesse Cohen, senior analyst at Investing.com, comments on the report which, despite the failures, sent shares of the company higher in after-hours trading.
“Alphabet delivered a disappointing quarter, with the search giant underperforming our expectations in almost every business unit. Despite the disappointing quarter, expectations were so low that investors breathed a sigh of relief, driving up the With a relatively low price-to-earnings ratio of 20, Alphabet remains one of the cheapest mega-cap tech companies from a valuation perspective.”
Meanwhile, the company’s outlook for the rest of 2022 doesn’t look too bright, noting that the growth seen in 2021 will continue to weigh on this year’s revenue growth, especially with services like YouTube, where advertisers reduce their expenses.
“Going forward, last year’s very strong revenue performance continues to create challenging mixes that will weigh on annual advertising revenue growth rates for the remainder of the year,” said Ruth Porat, Chief Financial Officer. from Alphabet and Google. call for earnings. “On YouTube and Network, spending declines by some advertisers in the second quarter reflect uncertainty around a number of hard-to-disaggregate factors.”