Google parent company Alphabet is reporting a fall in profits for the second quarter in a row.
The internet giant revealed in its Q2 2022 earnings report it brought in $16 billion of profit for the second quarter of the year, which represents a considerable drop from $18.5 billion the previous year.
More worrying than this Q2 drop for Alphabet is the fact that it follows on from a fall in profits for Q1 of the year. Back in April, the company reported profits of $16.4 billion, which was down from $17.9 billion in the same quarter of 2021.
The reason for this trend of declining profits is increased expenses, with the company spending about $3 billion more on research and development and sales and marketing.
In both quarters of the year so far, revenue has been high. For Q2 2022, $69.7 billion of revenue marks a steep increase on $61.9 billion in Q2 2021.
Alphabet continues to make the bulk of its money from good old fashioned Google advertising, which was responsible a hefty $40.7 billion of revenue in Q2. On top of that YouTube advertising brought in $7.3 billion, and the company’s Cloud business made around $6.2 billion – though the latter continues to be a loss-making enterprise.
It’s evident that even a company has large as Alphabet/Google is feeling the effects of the current financial downturn. Earlier in the month, CEO Sundar Pichai issued a memo to staff indicating that the company would be slowing down its hiring and pausing some of its development work due to current “economic headwinds”.