Unlike Meta, the 12,000 layoffs for Alphabet are coming at a sizable cost, with the company estimating a hit to the Q1 bottom line of around $2 billion. Almost all tech companies went on a hiring spree during the pandemic years, and by many accounts this went too far.
Outlook: Like Meta and the rest of the tech industry, the focus for Alphabet in 2023 is heavily on costs. The stock price was up 3.8% in premarket after the report and finished out the week up 6.01%. Revenue was down in the Google Search, YouTube Ads and Google Network units, but the overall figure was bolstered by a 32% increase in revenue from the Google Cloud. dollar, with 1% revenue growth amounting to 7% when adjusted for currency movements. A major impact was felt from currency fluctuations and the strong U.S. What happened: Google’s parent company felt the pinch in Q4 with slowing revenue growth resulting in a miss on both that and earnings per share. With that being said, the potential for a recession could put downwards pressure on ad revenue.
If Zuckerberg is able to bring focus back to their core business while also reducing overhead, the Year of Efficiency could be a good one for investors. Wall Street agrees, with the consensus forecast of $27 billion.Īctive users were up 5% over the year before and ad impressions and conversion rates were both up over 20%. The company has forecast revenue of $26 - $28.5 billion. Outlook: With these costs off the balance sheet for Q1 2023, investors will be keen to see whether Meta can improve on what was a terrible 2022. The company stated that the costs involved with the layoffs, such as severance payments, were ‘immaterial’ as they had been offset by savings in payroll, benefits and bonuses. This was helped along further by the announcement of further share buy backs, lowering the overall supply of stock to the market. Revenue was strong throughout the quarter, and this combined with the forecast for lower expenses for 2023 saw the share price spike 19%. What happened: Despite a pretty major miss on earnings per share, Meta stock bounced on the talk of cost cutting and Zuckerberg’s comments that 2023 would be the ‘Year of Efficiency.” This helps limit surprises at the next earnings call and hopefully minimize shocks to the stock price.
This is typically called an earnings report or an earnings call, as the CFO CFO or CEO will usually get on a call with shareholders to present the report.Īs well as recent historical data, they will generally also provide guidance to the market on what they expect in the coming months. This is typically details like revenue, debt levels, operating expenses and profits, as well as operational information such as active users for tech companies and number of vehicles sold for carmakers.Įvery quarter (three months) companies provide an update to the market which outlines all of this relevant information.
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