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Google CEO Sundar Pichai has been on a belt-tightening mission at Google over the past three months, so it seems he saw this coming: Parent company Alphabet's latest earnings are kind of a disaster. The company's Q3 2022 earnings were released last night, and they show a 27 percent drop in profits compared to last year, with weaker-than-expected earnings and revenue.
Revenue was up 6 percent year over year to $69.1 billion, a sharp growth decline from 2021 Q3, which saw 41 percent growth. Profits were at $13.9 billion, down from $18.9 billion in Q3 2021. As usual, Alphabet earnings are mostly about Google ad revenue and click-through rates, with the company citing reduced spending from the "insurance, loan, mortgage, and crypto subcategories" in particular. Worries about the economy and inflation are causing many Google customers to cut their ad budgets.
Alphabet doesn't break down the non-ads business in much detail, but the two biggest money losers on Alphabet's reports are the "Other Bets" section and Google Cloud. Other Bets lost $1.6 billion, more than the $1.29 billion loss a year ago. "Other Bets" is the "non-Google" part of Alphabet and includes long-term R&D projects like Waymo self-driving cars and the "Wing" drone delivery project. Google says the only significant revenue generators for Other Bets are the "health technology" projects—that would be Verily and/or Calico—and "Internet services," aka Google Fiber.
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