 Welcome to the channel. This is ReliableRooty. In this video we're going to go over Google's earnings report. I have not looked at their earnings report yet, but I did see that Google is down 8% today. And here's a little bit of kind of how I had my chart set up going into this. And you can see we're trying to hold kind of how I had my downtrend set right here. So pretty interesting. And also this WIC, the low of the day, did not get down to this gap fill over here as well. So I got some information that I want to go over, but I do want to take a look at their earnings report and share my 10 cents on what I think, and moving forward into the future with Google. But before we do that, I'm not a licensed financial advisor. Everything in this video contains only my opinion and is for entertainment purposes only. I do have a small position in Google and I own it in some of my index funds as well, so keep that in mind. But I'm going to try and give it as unbiased of an opinion as possible. Okay, going into the video. To get here, all I did was type in Google Investor Relations, click the very first tab, the very first thing that came up, and that is what brought me to here. So we're going to click on Q3 Press Release and see what we can find. Yeah, CEO makes some opening statements. It looks like revenue went up, increased 6% year over year from the third quarter from 2021. Operating income decrease by $4 billion. Now, this is one thing that would be a little bit alarming to me is the operating margin. So last year, they had operating margin at 32%. This year, 25%. So a decrease of 7% operating margin. So for people that are plugging numbers into a model to try and get a projection for a price, they want to buy it. If they were plugging in numbers around this 30% because they thought that they were going to get 30%, Google was going to continue putting up 30% operating margin and they only put up 25%, well, that's a flaw in your model. This is a very easy way to get value trapped into stuff in terms of if you were plugging in 30% for that model, it may be trying to tell you to buy it at a higher price than what they actually are going to perform. So that is a little bit of a concern right there, the lower, and that's a larger decrease in operating margin right now. It's not like they decreased like a couple percent. 7% is a decent decrease. And they had a decrease in net income. Deluded EPS earnings per share decreased as well. So this is also adding in, I'm sure Google probably bought back some shares, but even with that share, the shares that they bought back, this is a decent decrease in earnings per share. So a little bit of a red flag right there. But let's move on and see what else we can see. So we can look at the, this looks like the individual ways they earned revenue. So I can see they have an increase, they have a decrease in their YouTube ads. So a decrease in the YouTube part of their business. Is that a little bit alarming? It is a little bit alarming because you want to see the aspects of their business, especially YouTube is probably a larger part of their business model. You want to see that increasing. So we have a couple parts of this aspect decreasing. And that is the Google Network and the YouTube ads. So a little bit alarming there, but we do have some good growth right here in the Google Cloud. I know that is an aspect of multiple businesses that people are trying to push into. So it's good that they are having growth in that aspect of things. But at the end of the day, that's still a low percentage of their total business. I mean right around that same range as YouTube, but this is pretty good growth on the cloud. So that is a positive that comes off of this. And still a 6% increase in revenue. People are probably calculating any larger growth in 6%. But if I recall, I believe that was right in between my middle and low assumptions. So kind of right in the ballpark range. And I would say that could be a down quarter for Google, but I'm also calculating a model for a 10 year span. More information on the webcast. Let's go down into the balance sheet. So you can see they're sitting on a little bit more cash. They're counter-receivable. Looks like it is down a little bit. So they are getting the payments, more payments, and less receivables. So this is the money that's set to, that they're set to collect. They have less receivables there. Higher inventory. This is almost a, this is a 3 to 1 increase on inventory. So they're sitting on more inventory. Total current assets. Total assets. So let's take a look at this. Yeah, right around the same ballpark range for total assets and total long-term liabilities. Let's see if we can find anything on the long-term debt. So long-term debt pretty much the same area. So this is why it's probably insinuating that they're using some of that net income or free cash flow more towards the buybacks than the long-term debt. I don't remember off the top of my head what their average free cash flow is in the quarter, but if I recall their debt to free cash flow level is pretty solid. So I wouldn't be surprised if they focus more of that free cash flow to buying back shares, which is what I personally want to see as a shareholder in Google. I want to see them buying back shares. So total liabilities down. This sits at a current ratio of over 3 to 1. Like I said, Google is not going anywhere. They're not going out of business. When they have this many assets compared to their liabilities, this is a very good sign. I like the companies that I'm holding to have solid asset to liability ratio. Let's see what else we have. Let me read this real quick. Okay, I'm gonna move. I'm gonna move on from this. More of the revenue. So this is year to date revenue. So the their first two quarters actually adding in with this last quarter. This isn't terrible growth. So the 6% down. Yeah, a little bit concerning because that's a little bit less of an increase compared to the first and second quarter. But at the end of the day, when you're looking for my year to date standpoint, this is pretty solid growth right here. But one thing that is alarming with that growth at the very next line, cost of revenue. So this is year to date cost of revenue. This is an increase in, it looks like 13 million, 13 million in cost of revenue right there, increase right there. And quarter over quarter, this is an increase. And maybe it's 4 billion. Maybe I'm doing that calculation wrong. Yeah, it looks like it's, so this is an increase of 13 billion in the cost of revenue to obtain that revenue. So is this really that good of revenue growth? It's not the greatest because the cost of revenue is increasing that much. And on a quarter over quarter basis, almost an increase of 4 billion. That is a little bit concerning because I wouldn't look at that revenue growth as extremely good revenue growth. You can see the number, the increase of revenue from 2021 to 2022 is about the same. So I wouldn't look at that as, I would probably deem this revenue as a little bit of a red flag, but it's not the most concerning to me. And net income. So on top of that, they probably had other expenses that they had to add in. So you can see total cost of expenses. That increase right there is probably hurting this net income a little bit. So the decrease in net income is a little bit of a concern. And here we have the shares. So we can see year over year. Now I'd want to see, now this is a year over year basis, I would want to see the total amount of shares that they bought during this quarter. But year over year, that's a pretty decent amount of shares. But year over year, bought about 300 million shares back. So over the last four quarters, they bought 300 million of their shares back. Decreasing the total amount of shares out there is going to increase the shareholders ownership per share. So you want to see them consistently buying back more shares. Now you know what? Let's actually go and pull up everything money. I want to see what they were sitting at in the previous quarter. So I'm going to go to the income statement. We're going to switch this to quarterly. It doesn't look like they have it updated, but I can see. These are the shares that they bought back from last quarter. So they bought back about 70 million. They bought back 50 million. They bought back another 70 million. And now they've gone from 13.13 to 13. So they bought back about 120 million shares during this quarter. That is an increase in shares bought back for this quarter. So I would look at that as a pretty solid standpoint. Here's why. I'm going to show you. We're going to go to the metrics tab. And you can see this return on equity right here. This is them re... This is how efficient they are with their share buybacks and the dilution of shares. Of course it goes both ways. But the increase in the amount of shares that they're buying is a is a positive to me because this is me saying, okay, they were patient. They didn't focus on buying a lot of shares when the price was up here. And more so they're buying them down here. So I do like that look and that they increase the amount of shares that they're buying back. I look at that as a big positive. But even with the lower amount of shares, the EPS miss, I'm sure... I did see a headline that they missed on EPS. I think they were estimated $1.25. So that's a decent miss. But at the end of the day, I think long-term they're going to continue the buyback shares and they're going to benefit the long-term shareholders of the company. Now a statement of cash flows. Let's see if they just have a... Oh yeah, they do right here. So free cash flow on the quarter. I'm sure this is probably a decrease from the last quarter. But 16 billion in free cash flow. And we can see they bought back 120 million shares. So a large majority of that free cash flow is going back to buying back shares. I'm going to show you why they're able to do that. And now just to keep it simple, it's because look at this long-term liabilities divided by 5-year average free cash flow. They can pay off all their long-term liabilities in one year of free cash flow. This is why they are able to focus more on buying back shares. And that's one thing that I like as a shareholder. When they're able to buy back more and more shares quarter after quarter. So still free cash flow positive. Now let's actually go look at the cash flow statement. See what type of cash flow they brought in last year. So I can see this is the third quarter from last year. If I go down the free cash flow. So this is a decent decrease in free cash flow as well. And you can see that this is kind of going on. But if you're looking from the second quarter to the third quarter, it is a little bit of an increase in free cash flow. Now we know that from an economic standpoint this year, it's been pretty hectic out there. So it's nice to see that they are having a little bit of a pop from the second quarter to the third quarter in terms of increasing that free cash flow. I'd want to see this get back up into some consistent growth. So I want to see the next quarter build off of this 13 billion, or no not 13 billion 16 billion. So 16 billion comparing that to the last quarter free cash flow. I like that. That's a decent increase. I want to see that continue going on to the next quarter. And this breaks down the areas of the globe that they're getting revenue. Okay. There anything else? And this is the, so kind of a short earnings report. There are only nine pages. I wonder if there's more information out there. You know I might even go listen into the earnings call. But you know I'm not too focused on that right now. We're going to move on. We're going to talk more about this gap down right here. So I have this downtrend set right here. I really want to see this price hold. But if this gives out without having a pop, more than likely I'm going to see, we're going to see this price come down, down into this next window. Now you can see this window is set. We have a gap fill right here, gap fill right here, gap fill right here. I want to see it hold above this downtrend. So I want to see it actually extend up. Try to fill this large gap right here. It's probably not going to fill it. But at the end of the day I just want to see a short little pop off this before we crack down. Because I don't want to get back underneath this trend line. But if we get that short pop and then we come back down to this range, I'd want to see this downtrend meet up with this in some way, shape, or form in this next window. And that would strike me to sort of add to the position as it's only a small position right now. But at the end of the day, you can see the battle's taking place as we speak. Now if I was to get rid of this and you can see this battle's taking place, it does have a nice wick bottom right here at this previous support that's trying to hold. But there is no action. The open price actually opened beneath this gap fill. So we gap up on this day. We try to come back down and fill it. This kind of back test the top of this downtrend. You get a nice extension. Now on this earnings day, we reported earnings yesterday, the close happens at the previous low. This is not, this can to itself is bullish. But going into earnings, this is clear resistance. It acts as support multiple times. And over here it acted as resistance. So it acts as resistance, acts as support. We cracked below that support. Now it's acting as resistance. This is not a good sign in my opinion, which is why I think that the price is probably going to eventually come down to this window and how it acts from there. I'm not 100% sure. But nonetheless, I want to see it try the hold on top of this downtrend. I don't want to see it get back underneath that. If it is able to get bullish, let's see it actually fully push up and fill this gap down. If it's able to do that next couple of weeks, I would say that's a pretty bullish sign that this support is going to try to hold. And we're going to consolidate sideways until we get to this longer term downtrend. So you can see we have our downtrend from the start of this downtrend. One, two, three, four, fourth wave backtests on the bottom of wave one, and we get our fifth wave. Now I want to see it hold and trade sideways for a while. I don't want to see this support give out. But if it does, we already have a decent understanding of where its potential drop is going to come down to. And that's this next window that I have marked in right here from 90, call it 92 to 89 inside of that window. That's my update on Google's chart. Now let's see how the NASDAQ's happening. The NASDAQ, even with Google being a part of the NASDAQ, is still trying to hold inside of this range. And you can see if I get rid of this line, this was just insinuating a wave five. But there is a downtrend like this, in a sense. And you can see we have a little bit of a trading day above that, but I've already talked about one, two, three points of contact right here, and how it pretty much meets in right at the top of that. It's got to pick a direction. And the direction it shows was down here. Now we're pretty much broken. This is a confirm to me that even with the earnings of Google and Microsoft that the NASDAQ holding up above here, if we do trade down to this range, we have the top of this downtrend that could get good action. I want to see some sort of higher low from this bottom form in. So I'm going to take out this downtrend and show you kind of what I'm insinuating is if we trade back down to this window right here, that I want to see a higher low, and I want to see it go an attempt to test this downtrend that we have right here. Now, matching that up with this type of look, we have a decent, this is sort of starting to form a inverse head and shoulders. And where this price meets up at is the same price right here. So if we trade down to the top of this range, this is would be the completion of the inverse of the head and shoulders. This right here, I wouldn't consider because the price does not push up to this high. But now that we push up to this high, if we trade down here, it's going to complete that kind of inverse head and shoulders. Now let's see it push up to that downtrend and see how it acts. It's probably going to get rejected initially. But if it can start this uptrend right here, it's going to be a good resting area if we get rejected from this downtrend. So you get rejected from the downtrend. One, we push down, complete the inverse head and shoulders. We get some sort of pop up to this downtrend. And a rejection from this downtrend, I want to see this uptrend get good action and finally push this downtrend completing this inverse head and shoulders look right here. Now when we push this downtrend, I want to see this trend line continue to act. As we pull this further aside, this could meet in with the top of the downtrend and it could be early signs of a run. Now where this run could go up to. This is one big five wave structure right here. This could also be looked at as one single wave. There's your one single wave where you then have a retrace where I'm going to be focused on the 702. Here's my 702, this blue line. Now if we get rejected from there, it's going to instantly trigger me to think, okay, we could be looking at some sort of longer five wave structure that ends up painting out like this. Now this would be pretty bloody for the market. And this wave three could come down lower. But this is some sort of look that I would look for. And we have pretty solid support built in down here. So this is one thing that could see transpire. This could be the start of a retrace phase. I do not want to see this retrace get rejected in that 702, the 786 range, because that would be very bearish sign for me. But short term, this could be a retrace phase and opportunity in the short term to take advantage of. But long term, it could end up being pretty bloody for the market. Now if it doesn't get held up at this area, I'd want to see it kind of consolidate sideways and hold this support. And I want to see it truly test up to the top, pushing truly through all this, all of these retrace areas. That would be pretty good confirmation to me that you know, we're probably just going to trade sideways for a while. And if we're lucky enough, we can maybe take out this all time high sometime in the next couple years, that would be pretty bullish for me. But yep, that's a bear in a bull case scenario for the NASDAQ. And that is my update on Google as well. I hope you guys enjoy the content in this video. And we'll see you on the next one.