Alphabet was seeing around 15% YoY revenue growth prior to 2021. Then 2021 hit and the growth rate jumped to 41%. Now with the 6% YoY growth this year, it's evening out to ~22% annualized growth over the last 2 years.
To be clear, I mean that Alphabet revenue was about the same in both 2019 and 2020, so it's only growth since Q3 2020 that matters.
Any idea what the new headcount is doing? I can think of very little change in their services over the last handful of years, but apparently they have doubled in size in the last five! At best I could point at waymo, but they've gained 2k compared to 70k. And they already gutted stadia but that was never very big.
From their latest earnings release [0], they had 61.880 billion dollars in revenue for the second quarter and 144,056 employees so a simple annualization of that quarter would put them at 1.718 million dollars in revenue per employee.
Wait, they spent extra $30 billions in a quarter for research, development and marketing?
"Alphabet reported that its revenue rose 20 percent to $40.5 billion for the third quarter, but that profit dropped to $7.07 billion. Profit, which missed Wall Street forecasts, was hurt by rising costs for research and development and marketing, the company said."
According to this[0] ad revenue accounts for 82% of Alphabet's first quarter revenue in 2020 and I imagine a similar portion of previous quarters. You may have accidentally illuminated why this is probably a bigger scandal than it appears at first.
Not really? Revenue in Q1 and q2 for Alphabet were sinking. What went up were other areas than advertisment, as also they were doing some budget-savings, to reduce the actual fall of revenue, saving some costs at the end.
- Alphabet is experience massive decline in revenue growth. (Only 6% YoY growth vs 41% YoY growth in 2021)
- Internal costs are sharply increasing (Only a 25% Operating Margin vs 32% last year). A 7-point swing is massive. To put this into perspective, outside of tech, most companies only have ~10-point Operating Margin. So this swing of 7 points in margin, for most companies, could be the difference between being profitable vs not.
- Even though they are generating more total revenue than last year (same quarter) - they are considerable less profitable overall ($14B this year in Net Income vs $19B last year same quarter). This is related to the previous bullet.
reply