Google Q2 Earnings 2022: Flat growth in Revenue and Profit, miss estimates

Alphabet Q2 Earnings 2022
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Alphabet reported its Q2 earnings on Tuesday. The revenue and earnings showed growth but were below analysts' expectations. The Alphabet shares have lost one-fourth of their value this year.

Key Highlights of Alphabet Q2 Results:

  • Revenue Growth: $69.69 billion, up 13% YoY
  • Profits: $19.45 billion, flat year-on-year
  • TAC: $12.21 billion against $12.41 billion expected

Let us look at Alphabet's June quarter numbers in detail:

Alphabet Q2 Earnings 2022: Increase in revenue

 The revenue reported by Alphabet for Q2 was $69.69 billion, in line with the street estimate of $69.9 billion. The revenue growth in the June quarter was 13% compared to 62% a year earlier. The revenue from advertising came at $7.34 billion in Q2'22, lower than street estimates of $7.52 billion.

Alphabet Q2 Results: Segment Revenue

 The main revenue source for Alphabet is 'Search Engine' and its revenue stood at $40.69 billion. YouTube ad revenue for the June quarter came at $7.3 billion. The company’s cloud reported revenue growth of 35% to $6.28 billion against analysts' expectations of $6.41 billion. Advertising revenue increased to $56.3 billion, up 12%, as marketers reeled in their spending to manage inflationary pressures. 

Revenue in Alphabet’s Other Bets segment, which includes a self-driving car unit and some health-tech projects, and the company’s venture arms, rose by $1 million from the year-ago period to $193 million.

Google Quarterly Results: Profit remains flat

 Alphabet reported a marginal 0.4% increase in profit to $19.45 billion in Q2'22 from $19.36 billion in Q2'21. The Earning Per Share (EPS) was $1.21, as compared to the street estimate of $1.28.

Google Q2 Earnings 2022: Traffic Acquisition Costs (TAC)

 This metric is used to show how much the company pays other websites to acquire traffic. It came in higher than the street estimate of $12.41 billion at $12.21 billion. Google's traffic acquisition costs rose 11.76% YoY.

Alphabet Stock Split: 

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

Alphabet Q2: Increase in the headcount 

Google said its headcount rose to 174,014 full-time employees from 144,056 the year prior, up 21%. In the last month, the company will slow the hiring pace and investments in 2023 as it is not immune to economic headwinds.

Alphabet Revenue forecast: 

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

Alphabet Share target price: 

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

  • How was Alphabet June's result?

  • What is the latest TAC of Alphabet?

  • What is the target price of Alphabet?

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