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Alphabet Q2 FY2022 Earnings [pdf]
- gigatexal 4y agoRevenue grew 13% or 8B but operating income fell as did net income. Yikes. Either that additional 30k in headcount really took a toll or they are investing heavily in other areas. That or acquisition costs are rising. (I’m still reading the PDF).
- gigatexal 4y agoAhh pages 4 and 5 make more sense now. TAC went up 2B but also costs of revenue as well.
- gigatexal 4y agoTotal costs and expenses 42,519 50,232 (2021-2022) cost of revenue tracked more or less 1:1 with rise in revenue which is why net income was the same. Hmmm.
- donalhunt 4y agoCapex spend is one area mentioned in the Investor Relations call - primarily new datacenters, office fitouts and server purchases. Comparing q2 in 2021 and 2022 is difficult because the pandemic boosted revenues in 2021 but capex spend was delayed. And in 2022, some revenue didn't materialise due to uncertainty but investments for the future are being made. As usual with alphabet, look at the mukti-year trend. And don't be surprised to see investment in bets that will pay off in 5+ years time.
- oittaa 4y agoI would guess that all three major public cloud providers will have great growth at least for a decade ahead. People here sometimes forget that there are companies outside Silicon Valley startups.
- ac29 4y agoThey took a pretty big loss on debt and equity securities this quarter, compared to a profit in Q221. Roughly a $3B hit to net income. This might be realized or unrealized (mark to market) losses. See page 9.
- chollida1 4y agoNumbers: - Q1 EPS $1.21 vs EST $1.32 - Q2 Rev. of $70B vs est of $70B - Ad Rev. $56.3B vs EST of $56B, grew 12% on the year, good job!! but growth is way down from last year. - this add revenue is good, which indicates they aren't really affected by the Iphone privacy changes like META is. - operating margin came in at estimates - cloud lost $858M which is higher than expected - cloud Rev was 6.2B which is about what was expected - Other Bets lost $1.7B, which is small enough no one will care - other best revenue is $190M - stock is down about 24%, wich is a beta of almost 1, maybe googles growth is done and its becoming a typical old boring stock that just makes money now To Watch: - all advertising is slowing, Twitter, Snap and Pins are all below their IPO price and META is down big, whatch for GOOG advertising, though normally you'd expect search advertising to be more resistant - watch youtube add numbers, it really seems like they are playing alot more adds, normally I see 2 before each video now - will google cloud start to approach the big 2 of azure and aws - will they talk about hiring or layoffs Notes: - add revenue held up ok, compared to peers - other bets continues to not matter, at some point waymo has to put up or get shut down - will cash on hand grow or shrink? Looks like its down by about $10B - cloud unit disappoints with revenue - shares relatively flat after hours( up maybe 2%), probably a good trade to buy their peers now(snap, pins, etc, meta) - whoever runs Google cloud must have blackmail material on Pichai, AWS and MSFT run big profitable operating margins and google cloud is losing money, this is something they should be good at, but they are somehow the only one that has figure dout how to lose money on what is a cash cow for the big 2. What is going on with their cloud offering?? - zero hedge tweet that they've repurchased $15B of stock
- deleted 4y ago[deleted]
- shawabawa3 4y ago> stock is down about 24% I thought you meant it had massively crashed on this earnings It's down ~24% YTD (along with basically every other stock). Up ~2% after hours on this earnings report
- oneoff786 4y agoWhy is cloud a loss for Google but a cash cow for Amazon?
- paxys 4y agoMarginally better numbers than expected. Stock is up ~3% after hours.
- adam_arthur 4y agoWorse than expected by analysts, better than expected by investors. It was technically a miss
- robertlagrant 4y agoAnalysts got it wrong again?
- donalhunt 4y agoAlphabet are known for not providing any guidance to the analysts so I would take that with a pinch of salt. Consensus seems to be that the results could have been worse. Some signals that large advertisers are pulling spend in some areas. If that continues, you would expect Q3 earnings to be below the upward trajectory that Alphabet have enjoyed for years.
- candiodari 4y agoLet's not forget that that "upward trajectory" included a near 70% year-over-year increase in revenue on a stock market where 4% is the long-term norm. And Google did that, not as a $100k Market cap stock but as a $1 trillion market cap stock (ok 1 trillion ... after the gain). If Google's revenue stood entirely still for 3 years, they would still have outperformed the S&P500 comfortably. Frankly a -20% YoY revenue (the minus sign is not a mistake) would have been an excellent result. This is truly remarkable performance.
- darth_avocado 4y agoThere was a pullback because of the SNAP earnings and the sentiment was that the earnings are going to be bad. The reaction is to the fact that earnings weren’t bad, missed by a small number and revenue was up overall.
- arberx 4y agoThe earnings call will be interesting.
- chollida1 4y agoWhat specifically about this particular earnings call will be interesting? I can't see anything of note that hasn't happened 20x before.
- arberx 4y agoTiktok threat, current macro conditions, future quarter expectations, layoffs...so many things
- chollida1 4y agoI mean, sure but those are run of the mill things that can be said for almost every earnings call.
- arberx 4y agoOkay, I just said it would be interesting...it can be run of the mill + be interesting...
- dmitriid 4y agoHow is TikTok a threat to Google? Their core business (advertismenet) isn't affected so far.
- compiler-guy 4y agoGoogle added nearly 30k employees in the prior year. No way that amount of growth is sustainable. I doubt even half of those employees are up to speed sufficiently to add value to the company. Just absorbing that many people means scores of new teams, hundreds of new managers, and mountains of additional hardware. I'm sure they are seeing this in the costs.
- chickenpotpie 4y agoNot really that crazy when you have 174,000 employees. A 20% increase in employees isn't really that high when you also have a 13% increase in revenue.
- compiler-guy 4y agoProcuring 30,000 laptops is quite different than procuring 200 laptops. The logistics for 20% growth are materially different for a 100,000 person company vs a 1,000 person company.
- CydeWeys 4y ago> Procuring 30,000 laptops is quite different than procuring 200 laptops. Yes, you get a cheaper per-unit basis in bulk, and it becomes worth investing in larger scale automation to set up those laptops, so that the per-laptop cost of getting them ready for the employees is cheaper too. Economies of scale work in favor of larger numbers. A company that "only" procures 200 laptops per year won't even have a dedicated person for that job; if you're procuring 30k laptops per year you're going to have several full-time people whose only responsibility is working on and improving that process.
- onlyrealcuzzo 4y agoDwarfed by the advantage of printing billions per quarter in profits.
- Aethella 4y agoEvery employee they add also takes potential talent away from adding value to a start-up or competitor trying to catch-up. It's one way to protect your monopoly when there is a shortage of skilled labor.
- lifeisstillgood 4y agoGoogle: Total Rev: 70B, ads:57B, cloud 6B. Amazon: Total rev: 116B Ads: 31B cloud:71B It's reasonable to say that Google's biggest threat is Amazon's ad business. And instagrams not far behind.
- adam_arthur 4y agoAren't Amazon ads just sellers prioritizing their listing on the Amazon page? Seems totally different from the ad market for Google
- xyzzyz 4y agoAren't Google ads just businesses prioritizing their listings on Google search page?
- adam_arthur 4y agoWho will advertise a concert or any various services on Amazon? Or a restaurant? A conference? Very niche focus for Amazon vs broader set of customers for Google ads. Seems totally different to me
- kevinsundar 4y agoEcommerce sellers have higher margins (gross margin 40%) than the other services and businesses you mentioned. So they have more money to spend on Ads. Also Google competes with FB and has to split the advertising pie for those other services and businesses. Amazon owns basically the whole pie for the people who want to advertise products.
- adam_arthur 4y agoE-commerce has terrible margins Amazon itself had negative operating margins for its retail business last quarter. Amazon retail: "Its U.S. segment recorded $206 million in operating losses, while the international side lost $1.63 billion." Single digit margins at best, once a market is competitive. Edit: You edited your above, but gross margin is meaningless. It doesn't even include salaries for employees or infrastructure costs. Net margins for retail will always be slim, outside of specific first mover advantage in some subsectors. You think the Chinese companies selling $5 rubber spatulas are making 40% margins? Lol, try 5% or less. The theory that Amazon retail would grow revenues rapidly and then eventually expand to high operating margins will never come to fruition. Margins will be below 10% in perpetuity But sure, ignore all costs of running the business and look at gross margins.
- gok 4y ago
- abledon 4y agoby 2025 they will use a 3rd color other than white and blue for their 'material design' cloud console.
- deleted 4y ago[deleted]
- impulser_ 4y agoProbably until they catch up with AWS and Azure, if they ever do. But, they can lose money on it because they have the best money printing business in the world. 800m dollars aint much for a company pulling in 20b a quarter.
- spaceman_2020 4y agoOver the last few years, I’ve increasingly had to append site:reddit.com before any search query if I want some actual information. Product reviews on Google are garbage, but everyone knows that already. What really disappointed me is searching for any slightly complex medical condition. Most of the top results are just repetitive, generic advice from “trusted” names like Webmd. Not helpful at all.
- muro 4y agohttps://youtu.be/NT7_SxJ3oSI https://youtu.be/NT7_SxJ3oSI The ending has the point
- quux 4y agoFWIW my WaySus 22 has been great
- muro 4y agoNah, utter garbage :)
- spaceman_2020 4y agoNever knew he had his own channel. His ScreenRant pitch meeting videos are gold
- deleted 4y ago[deleted]
- greatpostman 4y agoNearly every negative google comment is downvoted
- ushakov 4y agoon HN this is usually the other way around at least as far i can remember
- greatpostman 4y agoSame, I’m surprised
- UncleMeat 4y agoThe earnings threads always invert the usual "google sucks" narrative because when it comes to money google is objectively raking it in. People can form opinions about the company's product strategy or engineering capabilities or ethics or social implications but the earnings threads are usually "wow, they sure do make a lot of money." It is just different topics.
- MegaButts 4y agoThis always happens when there's a popular post about big tech on HN. Google is a big company with lots of employees and lots of investors and HN is no longer a tiny corner of the internet. Just ignore the astroturfing and look for the signal in the noise.
- fshbbdssbbgdd 4y agoIf you poll consumers, Google is one of the most liked companies [0]. They don’t need to astroturf to get favorable comments. Also, accusations of astroturfing are against the HN site guidelines. If you think comments are wrong, tell us why they are wrong, don’t attack the authors. [0] https://morningconsult.com/most-loved-brands-2020/ https://morningconsult.com/most-loved-brands-2020/
- danielmarkbruce 4y agoCrazy good numbers given the environment and their size.
- jeffbee 4y agoAh but remember it’s “hard“ somehow to give google money. I read it here on HN. No idea where these billions came from.
- jmathai 4y agoGoogle might be the easiest company ever to give money to. 1. Open Browser to google.com 2. Type something 3. Press enter
- deleted 4y ago[deleted]
- jjulius 4y agoYou're selectively ignoring the context of that thread relative to this report for the sake of snark.
- Tempest1981 4y agoFor those wondering: https://news.ycombinator.com/item?id=32237445 https://news.ycombinator.com/item?id=32237445
- yunohn 4y agoThat thread was about (being unable to) pay for Google Ads, which is where the majority of Google’s revenue comes from. If it were commonly the case that paying Google is difficult, you’d see it reflected their earnings.