Revenue and earnings growth below expectations in Q2

Alphabet announced its second-quarter results on Tuesday. Revenue and profit showed growth but were below analysts’ expectations. Alphabet shares have lost a quarter of their value this year.

Key highlights from Alphabet Q2 results:

  • Revenue growth: $69.69 billion, up 13% year-on-year
  • Profits: $19.45 billion, flat year-over-year
  • TAC: $12.21 billion vs $12.41 billion expected

Let’s take a closer look at Alphabet’s June quarter numbers:

Alphabet Q2 Earnings 2022: Increase in turnover

Alphabet’s reported revenue for the second quarter was $69.69 billion, matching the estimate of $69.9 billion. Revenue growth in the June quarter was 13% versus 62% a year earlier. Ad revenue was $7.34 billion in Q2’22, below street estimates of $7.52 billion.

Alphabet Q2 Results: Segment Revenue

Alphabet’s main source of income is the “search engine” and its revenue was $40.69 billion. YouTube’s ad revenue for the June quarter was $7.3 billion. The company’s cloud reported revenue growth of 35% to $6.28 billion against analysts’ expectations of $6.41 billion. Ad revenue hit $56.3 billion, up 12% as marketers cut spending to manage inflationary pressures.

Revenue from Alphabet’s Other Bets segment, which includes a self-driving car unit and certain health-tech projects, as well as the company’s venture capital arms, was up $1 million from the period. the previous year to reach $193 million.

Google’s quarterly results: profits remain stable

Alphabet reported a marginal 0.4% increase in profit to $19.45 billion in Q2’22 from $19.36 billion in Q2’21. Earnings per share (EPS) was $1.21, compared to the street estimate of $1.28.

Google Q2 2022 Results: Traffic Acquisition Costs (TAC)

This metric is used to show how much the company pays other websites to acquire traffic. It is higher than the street estimate of $12.41 billion to $12.21 billion. Google’s traffic acquisition costs increased 11.76% year-over-year.

Splitting alphabetic actions:

The company has executed a 20-for-one stock split with a record date of July 1, 2022, effected as a one-time special stock dividend on each share of the Class A, Class B and class C of the company on July 15, 2022.

Alphabet Q2: Increase in numbers

Google said its workforce grew to 174,014 full-time employees from 144,056 the previous year, up 21%. Over the past month, the company will slow the pace of hiring and investment in 2023 as it is not immune to economic headwinds.

Alphabet revenue forecast:

The company did not provide revenue forecasts. However, analysts expect growth for the year of 14% to $293.9 billion.

Alphabet share price target:

According to estimates from 26 Wall Street analysts, the average price target is $144.45 with a high forecast of $205 and a low forecast of $113. The stock is currently trading at $105.02 per share.