Google also narrowly missed Wall Street analysts’ expectations for sales and earnings in the quarter. The company posted revenue of $69.7 billion in the quarter, an increase of 13% over the same quarter last year, forecasting the $69.9 billion forecast by analysts. Net income for the quarter fell more than 13% year-over-year to $16 billion, missing Wall Street estimates of $17.3 billion.
In a call with Wall Street analysts on Tuesday, Ruth Porat, Alphabet’s chief financial officer, pointed to “retreats in spending by some advertisers” due in part to economic uncertainty and “higher levels of engagement.” weak” with its products in relation to the pandemic.
“We are focused on hiring for engineering, technical and other critical roles…and working to increase productivity,” Alphabet CEO Sundar Pichai said on Tuesday’s call.
“It’s a privilege to build technologies that are useful in good times and in uncertain times,” added Pichai.
A bright spot in Google’s earnings was an almost 36% year-over-year revenue increase from its cloud computing segment.
“While advertising spend will rise and fall over economic cycles, the global shift to cloud computing as the backbone of all digital activities – advertising, marketing and sales – is long-term,” said Tom Johnson, global chief digital officer of media agency Mindshare Worldwide, in a note to investors following Google’s earnings report.