Alphabet (GOOGL) earnings Q3 2023

An illuminated Google logo is seen inside an office building in Zurich, Switzerland.

Arnd Wiegmann | Reuters

Alphabet is set to report third-quarter earnings after the bell Tuesday.

Here’s what Wall Street is expecting, based on a survey of analysts by LSEG, formerly known as Refinitiv:

  • Earnings per share: $1.45
  • Revenue: $75.97 billion

Here are some other key numbers analysts are watching:

  • YouTube advertising revenue: $7.81 billion expected, according to StreetAccount
  • Google Cloud revenue: $8.64 billion, according to StreetAccount
  • Traffic acquisition costs: $12.63 billion, according to StreetAccount

Google’s parent company is projected to show a return to double-digit revenue growth after four quarters of expansion mired in single digits. The company’s core advertising weakened due to economic softening last year and increased competition from TikTok.

In January, Google announced it was cutting 12,000 jobs, affecting roughly 6% of its full-time workforce, and last month, the company eliminated hundreds of positions from its recruiting organization.

During the third quarter, Google made focused layoffs in various business organizations within the company. An estimated 40 to 45 workers in the news division lost their jobs. The company also laid off more employees from its self-driving car unit Waymo, which recently announced an expansion of its driverless ride-sharing service.

While the company continues to resize after years of unbridled growth finally came to a halt, it’s also investing heavily in artificial intelligence.

Following the launch late last year of OpenAI’s ChatGPT chatbot, Google has been racing to add generative AI technology to more products and is testing it within core search. Generative AI, which provides more creative and thorough answers to simple text queries, could potentially have a major effect on Google’s search — and ads — business if people alter how they look for information online.

In the latest quarter, Google reshuffled its smart assistant that included layoffs as part of an effort to “supercharge” products with AI.

Sergey Brin, one of Google’s co-founders, reportedly made a rare appearance at a recent all-hands meeting, hyping up the company’s AI work. Earlier this month, product managers and designers for Google’s ChatGPT competitor Bard were reportedly skeptical about the tool’s helpfulness.

Along with the changes in its business, Google has seen a dramatic shake-up in its upper ranks. In July, finance chief Ruth Porat announced she will step down after eight years and take on a new role as president and chief investment officer. She told CNBC she’ll also engage with policymakers.

Also during the quarter, the Department of Justice began its antitrust trial with Google, alleging the company maintained a feedback loop with restrictive default contracts to preserve its search dominance. Eddy Cue, Apple’s senior vice president of services, testified that having Google as the default search engine on iPhones was best for consumers because “there wasn’t a valid alternative.” 

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