What you need to know
- Alphabet’s Q3 2023 earnings report sees the company generating $76.69 billion in earned revenue, an 11% increase YoY.
- Search generated $44.02 billion, YouTube ads gained $7.95 billion, while Google Cloud disappointed expectations, only generating $8.4 billion.
- Analysts attribute Google Cloud’s miss to customers cutting back on spending amid the current “macro backdrop.”
Alphabet has released its earnings report for Q3 2023, which concluded at the end of September. Following the closing bell today, the company reported $76.69 billion in earned revenue for Q3, slightly above what was expected by analysts, according to CNBC. Furthermore, this increase in revenue marks an 11% YoY (year-over-year) increase for the company.
Alphabet’s president and chief investment officer, Ruth Porat said, “The fundamental strength of our business was apparent again in Q3,” considering the aforementioned statistics. Porat added this was driven by “meaningful growth in Search and YouTube, and momentum in Cloud.”
Digging through each individual aspect on its own, Google’s parent company reported that Search generated $44.02 billion while ads from YouTube amassed $7.95 billion.
Generative AI was a pretty popular conversation during Alphabet’s Q2 2023 report, which the company has continued to press moving through Q3. The continuous rise in revenue generated by Search for this past quarter is likely attributed to Google’s efforts in bringing more AI features, courtesy of Search Labs, such as new image generation tools and AI-based summaries for lengthy articles.
Google Cloud, on the other hand, generated $8.4 billion — and analysts are not impressed with its rather “weak performance.”
According to Jesse Cohen, senior analyst at Investing, “Alphabet’s Google Cloud Platform sales growth came in below market expectations as customers cut back on cloud spending amid the current macro backdrop.”
Moreover, Q3 featured Google’s wave of recruiting team layoffs, which involved “hundreds” of personnel losing their jobs. This was apparently the result of the company reducing its hiring cadence, another instance of job cuts ahead of “40 to 45” people working in Google’s news division losing their jobs, as reported by CNBC.
These are only a couple of instances following the company’s massive 12,000 personnel layoff in January. Shifts in the economy have undoubtedly affected the company as its CEO, Sundar Pichai, stated that “tough choices” needed to be made as the company continues to place a firm focus on product and service quality that meets expectations.