alphabet Missed both top and bottom lines when reporting Q4 Earnings After Thursday bells. The company’s share price fell nearly 4% during off hours and lost some of its 7.28% rise during normal trading hours. It is like this when arranging numbers.
- Earnings per share (EPS): Expected $1.05 vs $1.18 per share, according to Refinitiv
- Earnings: $76.05 billion versus an estimate of $76.53 billion, according to Refinitiv
- YouTube ad revenue: $7.96 billion vs. StreetAccount estimates $8.25 billion.
- Google Cloud Earnings: $7.43 billion, estimated at $7.32 billion, according to StreetAccount estimates
- Traffic Acquisition Cost (TAC): $12.93 billion vs. $13.32 billion expected, according to StreetAccount estimates
The company said it will cost between $1.9 billion and $2.3 billion primarily in the first quarter of 2023, related to the 12,000 employee layoffs it announced in January. expects to incur costs of about $500 million related to the reduction in office space, and warns that other real estate costs may occur in the future.
CFO Ruth Porat said on the company’s earnings call that Alphabet added 3,455 people during the quarter, mostly in technical positions.
Porat told CNBC’s Deirdre Bosa that the company has significantly slowed the pace of hiring in order to achieve profitable growth over the long term, adding that in a difficult economic climate, planned advertising and direct response It said that both ads fell back because of YouTube’s slowdown.
YouTube ad revenue hit $7.96 billion, below analyst expectations. The previous year he was down 8% from $8.63 billion. In December, the National Football League announced that YouTube would pay about $2 billion a year for “Sunday Ticket” residency. The contract will last him for seven years.
In addition to the general decline in ad spend, YouTube is also facing increased competition from TikTok for short-form videos. The YouTube short now gets him 50 billion views per day, he said on a conference call with investors on Thursday, CEO Sundar Pichai said.
During the quarter, Google Cloud brought in $7.32 billion. This was below analyst expectations, but still up 32% year-on-year.
Google’s search and other revenue was $42.6 billion, down 2% from the previous year, according to the report. Management said some advertisers spent even less in the fourth quarter than they did in the third quarter.
Google’s other revenue, which includes hardware and YouTube non-ad revenue, increased 8% year over year to $8.8 billion.
Operating expenses rose 10% to $22.5 billion on higher headcount, lower litigation costs and lower advertising costs, executives said Thursday. The company also said it lost $1.49 billion in stocks during the quarter.
Revenue from Alphabet’s Other Bets segment, which includes self-driving car unit Waymo, some health tech projects and the company’s venture arm, rose to $226 million from $181 million a year earlier. The division lost $1.63 billion in the quarter, up from $1.45 billion a year earlier.
Management said that after the first quarter, artificial intelligence subsidiary DeepMind will no longer be reported to Other Bets and will be reported as part of Alphabet’s corporate expenses.
Executives on the conference call reiterated the company’s focus on AI. CEO Sundar Pichai said:
CNBC previously reported that Google was experimenting internally with several potential products that could impact its search business. The company is feeling pressure from the popularity of ChatGPT, an AI-based chatbot launched late last year by Microsoft-backed OpenAI. Management has previously teased that the company may bring a similar product to the public at some point this year.
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