Will Brexit Impact Alphabet’s Revenues In The Future?

The ‘leave’ outcome of the UK’s EU referendum fueled uncertainty in the financial markets around the world. The event is unlikely to impact the large technology companies significantly, as most of the large companies are geographically diversified. However, there might be a minor decline in US$ denominated earnings for these companies, as the dollar strengthens against global currencies, especially against the pound. We looked at the impact the Breexit might have on the Alphabet (NASDAQ:GOOG,GOOGL), which owns the search engine giant Google. Our analysis indicates that the Brexit will have minimal impact on Alphabet. Although the UK is one of the largest contributor to Google’s revenues (at 9.4%), the sensitivity analysis indicates that the appreciating USD against the pound will impact its topline by a maximum of $2.64 billion. This is not significant as the deviation in sales is only 2% of its projected total sales of $128 billion in 2020.

Have more questions about Alphabet? See the links below:

• What’s Alphabet’s Fundamental Value-Based On 2015 Results?
• By What Percentage Did Alphabet’s Revenue And EBITDA Increase In The Last Five Years?
• How Has Alphabet’s Revenue Composition Changed Over The Last 5 Years?
• By What Percentage Can Alphabet’s Revenues And EBITDA Grow In The Next 3 Years?
• How Much Are Advertiser Paying For Internet Users In Rest Of The World To Google?
• How Much Are Advertiser Paying For The US Internet Users To Google?
• What Was The Estimated Desktop Revenue Per Search For Google In 2015?
• How Much Revenue Can Desktop Search Generate For Alphabet By 2022?

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