July 28, 2022: -Alphabet reported less earnings and revenue for the second quarter. The stock increased above 4% in extended trading.

The revenue growth came down to 13% in the quarter from 62% a year earlier, when the company benefited from the post-pandemic reopening and consumer spending was growing.

Currency fluctuations that strengthened the dollar knocked 3.7 percentage points off revenue growth, CFO Ruth Porat told CNBC. Porat said the dollar’s strength would reach next quarter’s results even harder.

Porat also characterized the present outlook as “uncertainty in the global economic environment.”

Advertising revenue increased only 12% to $56.3 billion as marketers reeled their spending to contain inflationary pressures. The most visible deceleration was in the YouTube division, where sales increased 5% after jumping 84% in the identical period a year ago.

In addition to the pullback in ad spending, YouTube faces heightened competition from TikTok in short-form videos.

The report comes days following Snap affirmed disastrous quarterly results and said it plans to slow hires because “forward-looking visibility remains incredibly challenging.” In contrast to Snap, Alphabet shares increased just following its numbers were released, as investors may have been expecting more troubling signs.

The report showed that Google’s Search and Other revenue was $40.69 billion, up from $35.85 billion the year prior. That growth was increased by travel and retail queries, said Philipp Schindler, Google’s chief business officer.

Revenue in Alphabet’s Other Bets segment, including self-driving car unit Waymo, some health-tech projects, and the company’s venture arms, increased by $1 million from a year earlier to $193 million. It lost $1.69 billion in the quarter.

Google Cloud suddenly decreased revenue expectations and lost $858 million during the quarter. The cloud division tries to take share from Amazon Web Services and Microsoft Azure, the top two players in the market. On Tuesday, Microsoft said that revenue from Azure and other cloud services increased by 40%.

Alphabet said its headcount increased 21% to 174,014 full-time employees from 144,056. Nevertheless, the firm said last month it will slow the pace of hiring and investments via 2023. CEO Sundar Pichai told employees, “we’re not resistant to economic headwinds.”

The company expects those challenges to resume by the end of 2022.

“Going forward, the reliable earnings performance in the previous year continues to create tough comps that will weigh on growth rates of advertising revenues for the remainder of the year,” Porat spoke on the call.

Alphabet didn’t provide a payment prediction, but analysts anticipate growth for the year of 14% to $293.9 billion, according to Refinitiv. The shares have lost a quarter of their value this last year.