This archive report was first published on 29 October 2019.
On October 29, 2019, Alphabet, the parent company of Google, reported a 23% dip in profits to $7.1 billion, despite a 20% increase in revenue to $40.5 billion.
Shares in Alphabet fell 1.1% in after-hours trade, following the release of the company's earnings report.
Google's digital advertising business remained the primary source of revenue, generating $34 billion in the quarter.
However, revenue from other sources, including cloud computing, climbed more than 40% to $6.4 billion.
Alphabet has been investing heavily in research and development, particularly in artificial intelligence, cloud infrastructure, and new hardware products.
Research and development costs rose 25% to $6.6 billion, while sales and marketing expenses increased 20% to $4.6 billion.
"We continue to invest thoughtfully in talent and infrastructure to support our growth, particularly in newer areas like Cloud and machine learning," said Alphabet chief financial officer Ruth Porat.
As the company seeks to diversify its business, Alphabet has been exploring new hardware and services, including its Wing drone delivery service.
However, losses on "other bets" such as the Wing service ballooned to $941 million in the quarter, compared to a $727 million loss in the same period a year earlier.
