Google Cloud Earnings Preview: 5 Big Things To Watch For In Q3
From operating losses and sales growth to hiring freezes, here are the five biggest things to watch for during Google and Google Cloud’s third quarter financial earnings tomorrow.
Can Google Cloud Come Closer To Making A Profit?
Although Google’s cloud computing unit has no problem increasing sales, it isn’t making a profit.
For its most recent second quarter 2022, Google Cloud had an operating loss of $858 million.
In the first quarter 2022, Google Cloud reported an operating loss of $931 million.
However, this constant operating loss is most likely due to significant infrastructure investments. In order to keep up with cloud demand on a worldwide basis, Google pours billions each year into building, equipping and expanding its data centers which power its cloud services.
During a Q&A session at Google Next 2022, CEO Thomas Kurian noted that Google Cloud’s profitability margin was negative 82 percent when he took over the company almost four years ago.
Today, that figure is “approaching single digits,” he said.
“Alphabet’s board has options to invest in lots of things, and based on the results they’ve seen from Google Cloud, they are continuing to invest in our business,” said Kurian.
What To Look For: If Google Cloud’s operating loss decreases or increases compared to second quarter 2022. This will show if Kurian has the capability to make Google Cloud profitable in 2023.