Google Cloud Earnings Preview: Profit, AI And Sergey Brin
Can Google Cloud turn a profit again? Will there be any big Google AI announcements? Here’s five things to watch for during Google’s Q2 2023 earnings.
Google Cloud Sales Growth Rate Might Be Relatively Low
Zacks Consensus Estimate is predicting that Google Cloud captured $7.72 billion in revenue during the second quarter of 2023, which would represent a year over year sales increase of 23 percent.
If Zacks estimate is on par with the actual results, the 23 percent revenue growth rate estimate would be on the low-end for Google Cloud from an historical standpoint.
Google Cloud typically has reported year over year quarterly sales growth in the high 20s to high 30s over the past several quarters.
For example, Google Cloud grew total revenue by 28 percent year over year in Q1 2023 thanks to generating $7.45 billion in sales. In fourth quarter 2022, Google Cloud generated $7.3 billion in revenue, representing year over year sales growth of around 30 percent. During third quarter 2022, the company increased revenue by 38 percent year over year after generating $6.87 billion in sales.
The Takeaway: It is key to note that Google’s two largest cloud competitors, AWS and Microsoft, have both reported relatively lower cloud sales growth rates in 2023 compared to prior years. In Q1 2023, AWS reported cloud sales increased 16 percent year over year, while Microsoft’s Intelligent Cloud segment also reported a sales increase of 16 percent. If Google Cloud does in fact report a 23 percent sales increase for its second quarter, it will show that Google Cloud is now facing similar headwinds as AWS and Microsoft.