Alphabet, Google’s parent company, has reported a net profit of $13.9 billion in the third quarter (Q3), down 27 per cent from a year earlier, while revenue increased 6 per cent to $69.1 billion, amid global slowdown and recession fears.
Alphabet’s earnings fell short of Wall Street estimates of $16.9 billion in net profit.
In the last quarter (Q2), the tech giant earned nearly $69.7 billion with profits of around $16 billion.
Sundar Pichai, CEO of Alphabet and Google, said that “we are sharpening our focus on a clear set of product and business priorities”.
“Product announcements we’ve made in just the past month alone have shown that very clearly, including significant improvements to both Search and Cloud, powered by AI, and new ways to monetize YouTube Shorts,” Pichai said in a statement late on Tuesday.
According to Ruth Porat, CFO of Alphabet and Google, financial results for the third quarter reflect healthy fundamental growth in Search and momentum in Cloud, while affected by foreign exchange.
“We’re working to realign resources to fuel our highest growth priorities,” Porat added.
The Google Search ad sales grew 4 per cent to $39.5 billion.
Advertising raked in $54.4 billion, up from $53.1 billion, and Google Cloud jumped from $4.9 billion in Q3 2021 to almost $6.9 billion in 2022. The revenue from YouTube ads was slightly down in Q3.
Pichai said that the company has started the work to drive efficiency by realigning resources to invest in its biggest growth opportunities.
“Over the past quarter, we have made several shifts away from lower priority efforts to fuel higher growth priorities. Our Q4 headcount additions will be significantly lower than Q3. And as we plan for 2023, we’ll continue to make important trade-offs where needed and are focused on moderating operating expense growth,” he said.