Google’s parent Alphabet on Tuesday reported that its profit fell to $16 billion in the recently-ended quarter as long-sizzling ad revenue growth slowed.
Big tech companies are struggling with a variety of issues, from inflation to the war in Ukraine, and results so far this quarter have not been great.
Alphabet’s revenue rose 13 percent to $69.7 billion during the period, with global search and cloud-computing services taking most of the money — but that was below analysts’ expectations.
“As we sharpen our focus, we will continue to invest responsibly in deep computer science for the long term,” Alphabet Chief Executive Sundar Pichai said in the earnings release.
The internet giant’s stock rose about 2.5 percent in after-hours trading as the market seemed relieved by the results.
Alphabet’s earnings were about $2.5 billion higher in the same quarter last year, but the inflow of online advertising dollars that fuel the company’s fortunes has slowed as inflation, war and other troubles plague the broader economy .
Google also paid more to acquire online traffic, which it monetizes, the earnings report showed.
Meanwhile, revenue from ads on video platform YouTube increased only modestly in the quarter. Google sees YouTube as a source of growth as people spend more and more time watching online videos.
“In the second quarter, our performance was driven by search and cloud,” said Pichai.
Earnings season got off to a rocky start with less-than-stellar news from both Netflix and Snapchat’s parent company, a decidedly different world than it was during the pandemic surge.
Netflix reported last week that it had lost subscribers for a second straight quarter as the streaming giant grapples with stiff competition and tightening viewership, but the company assured investors of better days.
The loss of 970,000 paying customers last quarter wasn’t as large as expected, leaving Netflix with just under 221 million subscribers.
The company said in its earnings report that it expected to add 1 million paid subscribers in the current quarter.
At the same time, Snapchat’s owner last week announced plans to “substantially” slow recruitment after dismal results took about 30 percent off the tech company’s share price, which is struggling on multiple fronts.
Snap reported that its loss nearly tripled to $422 million in the recently ended quarter, despite revenue up 13 percent amid conditions that it said were “more challenging” than expected.
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