WASHINGTON, DC – DECEMBER 11: Google CEO Sundar Pichai testifies before the House Judiciary Committee at the Rayburn House Office Building on December 11, 2018 in Washington, DC. The committee held a hearing on ‘Transparency & Accountability: Examining Google and its Data Collection, Use and Filtering Practices.тАЭ (Photo by Alex Wong/Getty Images)
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Alphabet is scheduled to report earnings after the bell on Tuesday.
HereтАЩs what Wall Street analysts expect:
- Earnings: $1.07 per share, adjusted, according to Refinitiv.
- Revenue: $68.9 billion, according to Refinitiv.
Wall Street is also watching other key numbers:
- YouTube advertising revenue: $6.6 billion,┬аaccording to StreetAccount.
- Google Cloud revenue: $7.49 billion, according to StreetAccount.
- Traffic acquisition costs (TAC): $11.78 billion, according to StreetAccount.
Alphabet’s first quarter was highlighted by dramatic costs cuts, on the one hand, and a hefty focus on investments in artificial intelligence, on the other.
Coming off consecutive quarters of meek revenue growth, Google’s parent had its first major rounds of job cuts since the company’s public market debut nearly 19 years ago. In January, Alphabet said it was┬аeliminating 12,000 jobs, representing about 6% of its workforce.
Revenue growth in the first quarter is expected to come in at just over 1% as advertisers continue to reel in spending.
Finance chief Ruth Porat recently said in a rare companywide email that Google is making cuts to employee services, calling them тАЬbig, multi-year efforts.тАЭ
On its fourth-quarter┬аearnings┬аcall in early February, executives said they expect Google to incur costs of about $500 million in the current period related to reduced global office space. The company recently halted construction of its proposed 80-acre campus in San Jose, California, and doesn’t have plans to revive the project in the near future.┬а
While cost cuts are needed after the company ramped up hiring before and during the Covid pandemic, Google is also at the center of the part of the tech universe that’s generating the most excitement among investors.
Earlier this year, Google launched its AI chatbot product Bard to the public, after OpenAI’s ChatGPT service went viral starting in late 2022. Google employees slammed CEO Sundar Pichai for the apparently тАЬrushed” and “botchedтАЭ announcement of the ChatGPT competitor.
Microsoft, which invested in OpenAI, is integrating the startup’s technology into its Bing search engine and other services. Pichai told investors that the company is planning to roll out its LaMDA language model with search components тАЬvery soon,тАЭ suggesting pressure is building from Microsoft and OpenAI.
In a recent interview with the CBS program “60 Minutes,” Pichai said, тАЬevery product of every companyтАЭ will be impacted by the quick development of AI, warning that society needs to prepare for the advancements. He also said the scale of the problem of disinformation and fake news and images will be тАЬmuch bigger,тАЭ adding that тАЬit could cause harm.тАЭ
To equip itself for the AI boom, Alphabet said itтАЩs pulling its AI subsidiary DeepMind into Google, taking it out of “Other Bets,” and merging it with a research group called Google Brain.┬аThe company also began reshuffling the reporting structure of its virtual assistant unit тАФ called Assistant тАФ to focus more on┬аBard.
During the quarter, YouTube CEO Susan Wojcicki announced she was stepping down and will take on an advisory role across Google and Alphabet. Neal Mohan, chief product officer, became the new head of the digital video platform.
AlphabetтАЩs conference call will be streamed on YouTube at 5 p.m. ET.
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