Alphabet Misses Earnings Estimates But Ad Revenue Beats Expectations
Alphabet reports lower-than-expected earnings and slow revenue growth for the second quarter, but a slight beat in ad revenue eases investor fears. The tech giant's stock jumps 4% in after-hours trading despite a broader hiring slowdown.
Alphabet reports second-quarter earnings that miss Wall Street estimates, with adjusted earnings per share reaching $1.21 compared to the expected $1.32. Revenue excluding traffic acquisition costs comes in at $57.47 billion, falling short of the $58.14 billion analysts anticipate. Despite these misses, the tech giant's stock jumps 4% in after-hours trading, providing a brief recovery from its roughly 27% year-to-date decline.
The company's advertising revenue totals $56.29 billion during the period, narrowly beating analyst expectations of $56.14 billion. This modest beat offers relief to investors who worry about the digital advertising market following a dismal earnings report from Snap just a week prior. However, overall revenue growth slows significantly to just 13% year-over-year, a sharp drop from the 62% growth seen in the same period last year.
Alphabet cites foreign currency movements as a factor that reduces year-over-year revenue growth rates by 3.7%. Alongside the lackluster financial results, the company is scaling back on hiring and freezing onboarding for new workers for two weeks as teams prioritize their roles. Nevertheless, Alphabet's headcount reaches 174,014 by the end of June, showing a notable increase from the 144,056 employees reported in the second quarter of 2021.