Alphabet CEO Sundar Pichai walks to lunch at the Allen & Co. Media and Technology Conference in Sun Valley, Idaho, on July 12, 2023.
David Paul Morris | Bloomberg | Getty Images
Alphabet shares slid more than 4% in extended trading on Tuesday after the company reported ad revenue that missed analysts’ estimates.
Here are the key numbers:
- Earnings: $1.64 per share, adjusted, vs. $1.59 per share, adjusted, expected by LSEG, formerly known as Refinitiv.
- Revenue: $86.31 billion vs. the $85.33 billion expected by LSEG.
Wall Street is also looking at several other numbers in the report:
- Google Cloud: $9.19 billion vs. $8.94 billion expected, according to StreetAccount.
- YouTube ads: $9.2 billion vs. $9.21 billion expected, according to StreetAccount.
- Traffic acquisition costs: $13.9 billion, vs $14.1 billion, according to StreetAccount.
Alphabet reported its fastest quarter for revenue growth since early 2022, with sales climbing 13% from $76.05 billion a year earlier, the company said in a statement. However, ad revenue of $65.52 billion trailed analyst estimates of $65.94 billion, according to StreetAccount.
YouTube, which has been helping to drive accelerated growth, came in just shy of expectations.
Google Cloud, which competes with Amazon Web Services and Microsoft Azure, remains a growth engine, with expansion reaching 26% in the quarter from a year earlier.
Across Alphabet, CEO Sundar Pichai continues to focus on investments in artificial intelligence and embedding new generative AI tools into more of Google’s key products. To get there, Pichai has said the company has to make cuts elsewhere, which means more layoffs on top of 12,000 cuts last year, equal to roughly 6% of its full-time workforce.
“We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud,” Pichai said in Tuesday’s press release. “Each of these is already benefiting from our AI investments and innovation.”
Alphabet said that, due to the workforce reductions last year, the company recorded severance and related charges of $2.1 billion for 2023. Additionally, Google exited some of its offices, resulting in charges of $1.2 billion for the quarter and $1.8 billion for the year.
Net income jumped 52% in the fourth quarter to $20.7 billion, or $1.64 per share, from $13.6 billion, or $1.05 per share, a year earlier.
— CNBC’s Jennifer Elias contributed to this report.
