Google's parent company reported lower profit for the second quarter in a row, despite a nice rise in revenue.
According to the latest earnings report, Alphabet made around €16 billion in profit in the second quarter of 2022, compared to €18,5 billion in the same quarter last year. Meanwhile, total revenue for the quarter rose 12,6% year over year to $69.700 billion.
The reason for the disparity appears to be a combination of rising sales and marketing costs and increased spending on research and development, which cost the company an additional €3bn last quarter. Google also spent more money on mergers and acquisitions and took a €2.1bn hit in deferred income tax payments.
alphabetical results
As always, the bulk of Alphabet's revenue comes from its digital advertising business, with the "Google Search & Other" segment alone responsible for $40.700 billion in revenue during the second quarter.
The total ad revenue figure was supplemented by $7300 billion generated by YouTube advertising and $8300 billion from programs like Google Adsense, through which publishers and website owners host display ads on their own properties.
Although Google's cloud services business remains grossly unprofitable (it lost $858 million in the quarter), the division, which houses both Google Cloud products and Workspace productivity software, drew $6200 billion in sales, representing an increase of more than a third from 2021.
"In the second quarter, our performance was driven by search and the cloud," said Sundar Pichai, CEO of Alphabet and Google. "The investments we've made over the years in AI and IT help make our services particularly valuable to consumers and highly effective for businesses of all sizes."
"As we refine our approach, we will continue to invest responsibly in deep computing for the long term."
However, while total revenue numbers rose and tilted to the right across virtually all business segments, Alphabet posted its slowest sales growth in two years, possibly signaling trouble for companies in the digital ad industry. as companies cut costs.