Google posts major ad sales growth slowdown following pandemic boom

Sales from Google’s core advertising business hit $56 billion during the three months ended June 30, the company reported Tuesday. That marks an increase of 11.6% year-over-year, but it’s a significant slowdown in growth rate from the same quarter last year, during which it posted a nearly 69% increase in ad revenue as it benefited from a pandemic boom in online advertising.

Google also narrowly missed Wall Street analysts’ expectations for both sales and profits during the quarter. The company posted revenues of $69.7 billion during the quarter, an increase of 13% from the prior-year quarter, compared to the $69.9 billion analysts had projected. Net income for the quarter fell more than 13% year-over-year to $16 billion, missing Wall Street estimates of $17.3 billion.

Still, investors did not appear to be phased by the results, perhaps thanks in part to similar ad sales growth slowdowns reported by Twitter (TWTR) and Snap (SNAP) last week. Shares of Google parent Alphabet (GOOGL) rose more than 2.5% in after-hours trading Tuesday following the report.
But the challenging macroeconomic environment may continue to weigh on Google’s business in the upcoming quarters. Google earlier this month said it plans to slow its pace of hiring and rethink investments for the remainder of this year amid the market downturn and economic uncertainty.

“We are focused on hiring engineering, technical and other critical roles … and we are working to increase productivity,” Alphabet CEO Sundar Pichai said on a call with Wall Street analysts Tuesday.

Source link