Disagree.
The market is reacting to Cloud turning a profit for the first time, and faster than expected.
The market is reacting to Cloud turning a profit for the first time, and faster than expected.
Youtube was a large contributor to growth in 2021-2022, and that engine appears to have slowed. (Not just the "Youtube ads" line that is separated out.)
Most likely the market is reacting to these results not being any worse. Cloud gains were already priced into the stock, in my opinion.
So:
- ad revenue is down (that's 80-90% of all of their revenue)
- all their expenses are way up (cost of revenue 1B up, R&D expenses 2.3 B up, sales and marketing costs ~0.7 B up)
- "other bets" losses increased are 400 million higher YoY
- unallocated corporate losses are 3B higher YoY
But google cloud (which includes both GCP and Google Workspace) is 191 million in profit. Must be nice, I guess.
$2.5 billion of that is charges related to the layoffs.
> - all their expenses are way up (cost of revenue 1B up, R&D expenses 2.3 B up, sales and marketing costs ~0.7 B up)
Likewise half of this (i.e. you're double counting). See the table on page 3.
> - ad revenue is down (that's 80-90% of all of their revenue)
78% is not 80-90%. It's impressive that you managed to quote a ridiculously large range, and still get it wrong, in a discussiong about the earnings report.
The ad revenue from Google properties, not from the display ad network, is up.
I couldn't care less to calculate it this time. It fluctuates around the same number YoY
> The ad revenue from Google properties, not from the display ad network, is up.
And that somehow makes it less of an ad revenue? Or different? Or something?
Uh-huh. It was 77% in Q4, 79% in Q3, 80% in Q2. It has not been 90% for a decade.
> And that somehow makes it less of an ad revenue? Or different? Or something?
So you weren't making any kind of point when saying that ad revenue was down? If that's the case, I'm happy to also pretend that I'm also a member of the non sequitur club.
That would make Cloud by itself one of the 50 biggest companies in the world in terms of profits...
Companies are valued at profits for 10+ years. So Cloud continuing its promising growth trajectory is a very good thing for investors.
Obviously growth rates are unlikely to stay as high as they are for 5+ years - but the outlook for Cloud & Google - is still very promising.
If. Would. etc.
It could also not grow, and slip back to losing billions.
> Companies are valued at profits for 10+ years.
Wat?
It's been growing at similar rates for 13 years - rate of growth slowly decreasing.
It's way more likely to continue at it's rough trajectory than to have a sudden massive reversal.
But, sure, anything is possible. Google could also get obliterated by an alien civilization. Not gonna bet on that scenario, though.