Google parent company Alphabet today released unaudited financial results for the fourth quarter and full year of fiscal year 2022, which ended Dec. 31.
Alphabet’s revenue for the fourth quarter was $76.048 billion, up 1 percent from $75.325 billion a year earlier, and net income was $13.624 billion, down 34 percent from $20.642 billion a year earlier, according to the report.
Alphabet’s fourth-quarter revenue and earnings per share both missed analysts’ estimates, dragging the stock down more than 3 percent after hours.
Stock Performance.
Alphabet shares fell 3.74% after hours
Alphabet Class A shares (GOOGL) opened at $105.80 on the Nasdaq exchange on Thursday. As of Thursday’s close, Alphabet’s stock price rose $7.31, or 7.28%, to close at $107.74. As of 16:36 U.S. Eastern Time on Thursday (5:36 U.S. Friday Beijing Time), Alphabet shares fell $4.03, or 3.74%, to $103.71. In the past 52 weeks, Alphabet’s stock price has reached as high as $149.68 and as low as $83.34.
Fourth quarter results highlights:
——Revenue was $76.048 billion, an increase of 1% from $75.325 billion in the same period last year, and an increase of 7% at constant exchange rates;
・Total advertising revenue was US$59.042 billion, a decrease of 4% from US$61.239 billion in the same period last year;
・Google Cloud revenue was US$7.315 billion, an increase of 32% from US$5.541 billion in the same period last year;
・Other business revenue was $226 million, an increase of 25% from $181 million in the same period last year;
——Traffic acquisition costs (TAC) were $12.925 billion, down 4% from $13.427 billion in the same period last year; other expenses, net, were $1.013 billion, compared to other income of $2.517 billion in the same period last year;
—— Operating profit was US$18.160 billion, down 17% from US$21.885 billion in the same period last year; operating margin was 24%, down 5 percentage points from 29% in the same period last year;
——Net profit was US$13.624 billion, down 34% from US$20.642 billion in the same period last year;
— Diluted earnings per share of $1.05, down 31% from $1.53 in the prior-year period;
—— The total number of employees was 190,234, compared with 156,500 in the same period last year.
Layoff plan:
Google said that in January 2023, the company announced that it would cut about 12,000 jobs. We expect employee severance and related charges from this move to be between $1.9 billion and $2.3 billion, the majority of which will be recognized in the first quarter of 2023. In addition, Google is taking action to optimize its global office space, which is expected to incur about $500 million in related exit costs in the first quarter of 2023. More spending could come as Google further evaluates its real estate needs.
2022 Annual Results Highlights:
——Revenue was US$282.836 billion, an increase of 10% from US$257.637 billion in the previous year, and a year-on-year increase of 14% at constant exchange rates;
—— Net profit was US$59.972 billion, down 21% from US$76.033 billion in the previous year.
Executive comments:
Alphabet CEO Sundar Pichai said: “Our long-term investment in deep computer science puts us in an excellent position as artificial intelligence reaches an inflection point. I am excited about our upcoming announcements in search and beyond.” We are excited about the artificial intelligence-driven leap forward in 2019. Cloud computing, YouTube subscriptions, and our Pixel devices are gaining momentum as well. We are on an important journey to redesign our cost structure in a lasting to build a sustainable, vibrant and growing business across Alphabet.”
