Alphabet: Shares holding steady (Der Aktionär)

Google parent company's revenue growth slows but still beats expectations

Alphabet reported fiscal Q2 revenue of $69.69 billion, up 13% year-over-year, beating analyst expectations of $69.58 billion. The company's net income was $16.04 billion, or $1.21 per share, up 11% year-over-year and beating expectations of $1.19 per share. This marks a slowdown in revenue growth compared to the 23% year-over-year growth reported in Q1 2023.

The company's advertising revenue, which accounts for the majority of its sales, grew 12% year-over-year to $56.3 billion. This was driven by strong growth in search and YouTube advertising. Google Cloud revenue also grew 36% year-over-year to $6.28 billion, continuing the segment's strong growth trajectory.

However, the company's "Other Bets" segment, which includes businesses like Waymo and Verily, reported a loss of $1.69 billion, wider than the $1.25 billion loss reported in the same period last year. This segment has consistently been a drag on Alphabet's overall profitability.

Earnings call highlights

During the earnings call, Alphabet CEO Sundar Pichai said that the company is "pleased with the momentum" it is seeing across its businesses. He highlighted the strong growth in search and YouTube advertising, as well as the continued momentum in Google Cloud.

Pichai also addressed the slowdown in revenue growth, saying that the company is "mindful of the macroeconomic environment" and is taking steps to "manage expenses and invest for the long term."

Analyst commentary

Analysts were generally positive on Alphabet's results, with many highlighting the company's continued growth in advertising and cloud computing. However, some analysts expressed concern about the slowdown in revenue growth and the widening losses in the "Other Bets" segment.

Overall, Alphabet's Q2 results were solid, with the company beating expectations on both revenue and earnings. While the slowdown in revenue growth is a concern, the company's strong performance in its core advertising and cloud businesses suggests that it is well-positioned to weather the current economic environment.