Alphabet (NASDAQ: GOOGL) announced its 2023 Q2 financial results on July 25, 2023. According to the announcement, revenues were up 7.1% (YoY, 3 months). On the other hand, income from operations was up 12.3% and net income was up 14.8% (YoY, 3 months).
Looking at revenue growth by services, Google Cloud showed the highest growth of up 28.0% (YoY, 3 months). Google Search & other followed this with up 4.8%. Meanwhile, Google Network showed the biggest slowdown at down 5.0%. YouTube ads showed moderate growth of up 4.4%.
As for segment margin, Google Services recorded 34.4% (3 months). However, the other business segments are recording operating losses. It would be desired that these segments including Google cloud become profitable.
Looking at geographical revenue trends, APAC showed the highest growth of up 8.7% (YoY, 3 months, USD). It was followed by EMEA of up 8.6%. Revenue in United States was up 7.2%, and that in Other America was up 4.9%.
As you can see, Alphabet’s revenue growth has been slowed down to single digits growth after 2022 Q2. However, the company has been cutting costs since 2023 Q1. As a result, net cash provided by operating activities was up 47.6% on year-over-year basis (3 months). It was up 14.2% on quarter-over-quarter basis.
As for free cash flow, the company recorded cash inflow of 17,866 million USD, up 17.3% year-over-year basis. However, FCF was down 13.1% quarter-over-quarter basis.
In general, Alphabet’s stock price trend at least after the COVID-19 pandemic is highly correlated with the trend of operating cash flow of the previous quarter. Alphabet’s strong growth in the operating cash flow in 2023 Q2 could give an optimistic outlook for the company’s future stock price trend.
- Watanabe & Brothers’ Investment is holding shares of Alphabet.
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