Alphabet, parent company of Google and YouTube, turned in fourth-quarter 2022 earnings that missed analyst estimates, as YouTube’s ad revenue again suffered a year-over-year decline.
Overall, Alphabet posted revenue of $76.05 billion, up just 1%, and net income of $13.62 billion (down 34% versus $20.6 billion in Q4 2021), or earnings of $1.05 per share. YouTube ad revenue was $7.96 billion in Q4, down 7.8% from $8.63 billion a year earlier.
Analysts expected YouTube advertising revenue to come in at $8.2 billion for the most recent quarter, per FactSet. Total revenue was pegged at $76.58 billion, with earnings per share of $1.19, according to Refinitiv.
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Alphabet, along with other tech companies, recently announced layoffs to reduce costs. The tech giant last month said it was eliminating 12,000 jobs, or about 6% of its global workforce.
“We’re on an important journey to reengineer our cost structure in a durable way and to build financially sustainable, vibrant, growing businesses across Alphabet,” Sundar Pichai, CEO of Alphabet and Google, said in prepared remarks. He touted “great momentum” in Google’s Cloud segment as well as in YouTube subscriptions (which the company does not break out in its earnings), as well as Google Pixel devices.
The internet company said it expects to incur employee severance costs and related charges of between $1.9 billion and $2.3 billion, the majority of which will be recognized in the first quarter of 2023. In addition, Alphabet projected costs relating to office space reductions of approximately $500 million in Q1.
CFO Ruth Porat said the company has “significant work underway to improve all aspects of our cost structure.” According to Alphabet, overall Q4 revenue would have grown 7% excluding the impact of foreign currency exchange rates.