Alphabet Inc, the parent company behind the search engine giant Google, saw a financial slump in 2022. The profit figures dropped more than $1 billion compared to last year, but on the other hand, the revenue saw a healthy increase.

Alphabet made a record-breaking $257 billion annual revenue in 2021. This was the first time the company had gone over $200 billion in a year, but the start of 2022 proved to be even better. Alphabet reports that Q1 2022 revenue was up by 23% compared to the same period last year, reaching $68 billion.

However, the company’s net profit is a different story. While Alphabet’s earnings did go up in 2022, so did the expenses. Consequently, the net profit figure dropped to $16.4 billion, down from last year’s $17.9 billion. This was caused by an increase in Research and Development costs, which went up more than $1 billion compared to last year, reaching $9.1 billion.

As per New York Times’ reported figures, Alphabet had a $4.8 billion gain in stock holdings last year, but Q1 2022 showed a $1.07 billion loss.

Google Search brought in a healthy $39 billion revenue this year, which was a significant increase from last year’s $31 billion. Google Search, ads, and YouTube managed to bring in $54 billion in the first quarter alone.

YouTube’s ad revenue also improved over last year, but it showed slower growth compared to the last few years. The video-sharing platform grew by 30% in 2021, but only by 20% this year due to the increased competition from TikTok.

YouTube has responded by working harder on YouTube Shorts, but the growth did not meet analyst expectations.

Google and Alphabet CEO Sundar Pichai commented on Q1’s financial report saying:

Q1 saw strong growth in Search and Cloud, in particular, which are both helping people and businesses as the digital transformation continues. We’ll keep investing in great products and services, and creating opportunities for partners and local communities around the world