Google parent Alphabet’s profit slips again after CEO warns of “economic headwinds”

Profits are down at Google parent company Alphabet for the second quarter in a row, even as it brings in more money. Alphabet brought in around $16 billion in profit during its second quarter of 2022, down from $18.5 billion during the same period last year, the company reported in its Q2 2022 earnings report this afternoon.

As with last quarter, it seems like rising expenses have played a part; the company actually brought in more revenue than it did in Q2 2021. This quarter, its revenues were almost $69.7 billion, up from last year’s $61.9 billion. However, compared to this time in 2021, Google’s spending around $3 billion more on both research and development and sales and marketing.

As for how Google made its money, the breakdown is similar to last year. “Google Search & other” ads are still Google’s bread and butter, bringing in almost $40.7 billion. Google’s Cloud business made around $6.2 billion in revenue (though as usual Google lost money on it overall — around $858 million). YouTube advertising made the company around $7.3 billion. While that’s a substantial sum, Variety reports that it represents the slowest growth for the video platform that Google’s seen in over two years. Compared to Q2 2021, Google’s revenue was up for pretty much all of its segments.

During the past month, Google has warned employees that times could be getting tough. Early in July, Google CEO Sundar Pichai sent a memo warning that the company’s “not immune to economic headwinds” and saying that the company would “need to be more entrepreneurial, working with greater urgency, sharper focus, and more hunger than we’ve shown on sunnier days.” Just over a week later, the company reportedly told employees it was pausing hiring for two weeks, saying that it would use the time to “review our headcount.”

The earnings help provide some context for those moves — Google ended Q2 2021 with 144,056 employees. By Q2 2022, that number had ballooned to 174,014.