Even though Google Cloud revenue growth showed signs of slowing, it nevertheless provided something of a bright spot as parent company Alphabet — hit hard by the tightening of customer budgets — posted a year-over-year decline in net income for its 2022 fourth quarter.
Fourth-quarter gross revenue for Alphabet was $76.05 billion, up just 1% from $75.3 billion a year ago. Net income was $13.6 billion, down 34% from $20.6 billion in the fourth quarter of 2021.
Even though revenue grew slightly, rising expenses — mainly for research and development — helped cause the steep drop in net income.
One of the best-performing business segments for the quarter was Google Cloud, where revenue was up by 32% year on year, growing to $7.32 billion.
Google Cloud cuts losses
Google Cloud was one business unit that managed to keep costs down, which helped cut losses. The business unit operated at a $480 million loss in the most recent quarter, compared to the $890 million it lost in the year-earlier period. Though cloud computing provides revenue opportunities for Google and competitors including Microsoft and AWS, costs related to expanding and running infrastructure are high.
It wasn’t all good news for the cloud business, though. Even though cloud revenue was up, growth was slower than the 38% jump in revenue the company reported for the third quarter.
Meanwhile, Google’s total advertising sales fell to $59 billion, down 3.6% from the $61.2 billion the company posted a year earlier. In particular, a slowdown on YouTube advertising spend, caused revenue to fall