Google Misses on Earnings and Revenue, Beats on Cloud

GOOGL Q3 earnings and revenue fell short of estimates

By
Nathan Reiff
Full Bio
Nathan Reiff has been writing expert articles and news about financial topics such as investing and trading, cryptocurrency, ETFs, and alternative investments on Investopedia since 2016.
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Published October 25, 2022
In this photo illustration, the logo of the Gmail app homepage is seen on the screen of an iPhone in front of a computer screen showing a Google logo on July 04, 2018 in Paris, France.
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Key Takeaways

  • Google Cloud revenue topped analysts' expectations.
  • Google Cloud is one of Alphabet's primary business segments. It provides developers with a cloud platform for building, testing, and deploying applications.
  • Companywide earnings and revenue missed expectations.
Google (Alphabet) Earnings Results
Metric Beat/Miss/Match Reported Value Analysts' Prediction
Earnings Per Share Miss $1.06 $1.25
Revenue Miss $69.1B $70.8B
Google Cloud Revenue Beat  $6.9B $6.7B

Source: Predictions based on analysts' consensus from Visible Alpha

Google (Alphabet) Financial Results: Analysis

Alphabet (Google) Inc. (GOOGL, GOOG), the third-largest tech company by market value, missed analysts' estimates for profit and revenue for the third quarter amid a challenging foreign exchange environment and falling YouTube ad sales. Its shares dropped.

Alphabet's earnings per share (EPS) fell by 24% to $1.06, compared with a consensus estimate of $1.25. Revenue climbed by 6% to $69.1 billion, also below expectations.

A strengthening dollar has hurt companies with a broad international scope such as Alphabet. A cooling economy and rampant inflation have also damaged advertising budgets, which in turn slows revenue for Alphabet's key YouTube ads business. Increasing competition from TikTok has also undermined ad sales.

Google Cloud Revenue

At Google Cloud, a primary business segment along with Google Services, revenue grew 38% to $6.9 billion, beating analyst predictions. The cloud segment provides developers with a scalable and reliable platform for building, testing, and deploying applications. It also offers workspace collaboration tools, including apps such as Gmail, Docs, Drive, Calendar, and Meet.

GOOGL Outlook and Stock Performance

Alphabet didn't provide forward guidance.

Shares of GOOGL fell by 5% in after-hours trading as of 4:12 p.m. New York Time on Oct. 25. The company's stock has dropped by 24% in the last year, compared with a 15% decline in the the S&P 500 Index.

Alphabet's next earnings report (for Q4 FY 2022) is expected to be released on Jan. 31, 2023.

Article Sources
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  2. Alphabet Inc. "Alphabet Announces Third Quarter 2022 Results," Pages 1-2.

  3. Visible Alpha. "Financial Data."

  4. Nasdaq. "Will Q3 Earnings Boost Alphabet (GOOGL) Stock?"

  5. Wall Street Journal. "Three Things Marketers Should Know About Ad Spending Trends."

  6. Alphabet Inc. "Form 10-K for the Fiscal Year Ended Dec. 31, 2021," Pages 6 & 7.

  7. Yahoo! Finance. "Alphabet Inc. (GOOGL)."

  8. TradingView. "Price Chart: GOOGL and S&P 500."

  9. MarketScreener. "Alphabet Inc. (GOOGL)."

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