Alphabet (GOOGL 0.83%) (GOOG 0.72%) reported third-quarter 2022 results after the market close on Tuesday. Following the release, Class A (GOOGL) and Class C (GOOG) shares of the Google parent and technology giant declined 6.6% and 6.7%, respectively, in Tuesday's after-hours trading session.

Investors' negative reaction can be attributed in part to the quarter's revenue and earnings missing Wall Street's expectations. Moreover, that revenue edged up just 2.5% in the company's core advertising business likely suggests to some investors that further slowdowns in the U.S. and world economies -- including a U.S. recession -- could be on the horizon.

Here's an overview of Alphabet's third-quarter results, centered around four key metrics.

1. Revenue rose 6%

Alphabet's net sales increased 6% year over year (and 11% in constant currency) to $69.1 billion, falling short of the $70.2 billion Wall Street had expected. Growth was driven by Google Cloud and Google Search. (For context, in Q2, revenue increased 13% year over year, and 16% in constant currency, to $69.7 billion.) 

Traffic acquisition cost decreased revenue by $11.8 billion, up 3% from the year-ago period.

The company was facing a tough comparable, as revenue surged 41% year over year in the third quarter of 2021. That quarter was likely still getting a boost from more people than usual working from home during the pandemic and some folks still not venturing out as much as they did prior to the crisis. 

Segment Q3 2022 Revenue YOY Change
Google Search and other (advertising) $39.5 billion 4.3%   
YouTube advertising $7.1 billion (1.9%)
Google Network (advertising) $7.9 billion (1.6%)
Google advertising total $54.5 billion 2.5%    
Google other $6.9 billion 2.1%
Google Services total $61.4 billion 2.5%
Google Cloud $6.9 billion 38%
Other bets $209 million 15%
Hedging gain (loss) $638 million 929%
Total  $69.1 billion 6.1%

Data source: Alphabet. YOY = year-over-year.

For context, in the second quarter, total ad revenue increased 12% year over year. Ad revenue for Google Search and other, YouTube, and Google Network rose 14%, 5%, and 9%, respectively.

In the third quarter, YouTube revenue declined about 2% year over year after growing just 5% year over year in the second quarter. There can be little doubt that the increasing popularity of TikTok is hurting Alphabet's video-streaming platform, which was growing at a strong pace not that long ago. 

2. Operating income declined 19%

Operating income dropped 19% year over year to $17.1 billion. Operating margin (operating income divided by revenue) was 25%, down from 32% in the year-ago period.

Google Services (includes the company's core ad business plus Google other, which is heavily comprised of hardware) contributed all the operating income (and then some), as the Google Cloud and other bets segments had operating losses. 

3. EPS dropped 24%

Net income came in at $13.9 billion, or $1.06 per share, down 24% from the year-ago period. Wall Street was looking for earnings per share of $1.26, so the company missed this expectation.

4. Operating cash flow fell 9%

Alphabet's operating cash flow was $23.4 billion, down 9% from the prior year's quarter. The company ended the period with cash and cash equivalents of $22 billion, down from $23.7 billion in the year-ago period.

A disappointing quarter, but cash flow remains solid

Alphabet turned in a disappointing quarter, though long-term investors shouldn't be overly concerned with short-term results. Moreover, while earnings declined 24% year over year, the company's operating cash flow remains solid and resilient. It fell just 9% from the year-ago period.

Investors should keep close tabs on YouTube's results. They're likely being hurt by competition from TikTok -- which is extremely popular among younger people -- rather than by macroeconomic factors alone.