Alphabet, Google’s parent company, reported financial results Tuesday for the quarter ended September 30, 2022.
“We’re sharpening our focus on a clear set of product and business priorities,” stated Sundar Pichai, CEO of Alphabet and Google. “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.
Third-quarter revenue rose 6% to $69.1 billion, compared with the year-ago quarter.
Financial results for the third quarter reflect “healthy fundamental growth in Search and momentum in Cloud, while affected by foreign exchange,” said Ruth Porat, CFO of Alphabet and Google.
Search and Google Cloud services became the silver lining in Q3 2022.
Google Cloud reported revenue of $6.8 billion for the third quarter of 2022 -- up from $4.99 billion in the year-ago quarter.
But the division operated at a loss, along with other bets and corporate costs.
"When Google stumbles, it's a bad omen for digital advertising at large,” said Insider Intelligence Principal Analyst Evelyn Mitchel. “Not only did Google miss analyst expectations for topline revenue, YouTube ad revenues shrank for the first time since Google started reporting YouTube earnings separately in Q4 2019, due in large part to persistent competition in streaming and short video.”
Mitchel said that even Google's search advertising business, historically less affected by budget cuts in times of economic instability, struggled.
“This disappointing quarter for Google signifies hard times ahead if market conditions continue to deteriorate,” Mitchel said.
Google Services carried the losses generating $19.78 billion for the quarter. Total income from operations, $17.1 billion in Q3 2022, down from $21 billion in Q3 2021.
Google Search & Other contributed revenue of $39.5 billion in Q3 2022 vs $37.9 billion in Q3 2021. YouTube ads came in lower this year with $7.07 billion in Q3 2022 vs $7.2 in Q3 2021. Google Network contributed revenue of $7.87 billion in Q3 2022 vs $7.99 billion in Q3 2021.