Alphabet, the parent company of Google, experienced a more than 6% decline in its shares during extended trading on Tuesday after reporting ad revenue that fell short of analysts’ estimates. Here are the key figures from the report:
Earnings per share: $1.64 vs. $1.59 expected by LSEG (formerly Refinitiv).
Revenue: $86.31 billion vs. $85.33 billion expected by LSEG.
Google Cloud: $9.19 billion vs. $8.94 billion expected (StreetAccount).
YouTube ads: $9.2 billion vs. $9.21 billion expected (StreetAccount).
Traffic acquisition costs: $13.9 billion vs. $14.1 billion (StreetAccount).
While Alphabet reported its fastest quarter for revenue growth since early 2022, with a 13% increase from a year earlier, the ad revenue of $65.52 billion fell short of analysts’ expectations of $65.94 billion. YouTube, a significant contributor to growth, narrowly missed expectations.
Although the results generally exceeded estimates, investors were not satisfied, as Facebook’s ad business is growing at a faster pace, and TikTok poses an ongoing competitive threat. Google Cloud remains a growth engine, with a 26% expansion in the fourth quarter compared to the previous year. Operating income for the cloud business was $864 million, a significant improvement from the year-ago loss of $186 million.
CEO Sundar Pichai continues to emphasize investments in artificial intelligence, embedding new generative AI tools into Google’s key products. However, these investments come at the cost of workforce reductions, with additional layoffs expected following last year’s cut of 12,000 jobs.
Net income for the fourth quarter increased by 52% to $20.7 billion, or $1.64 per share, compared to $13.6 billion, or $1.05 per share, in the same period the previous year. Operating margin expanded to 27% from 24%.
The Other Bets segment, which includes Waymo (self-driving car business) and Verily (life sciences unit), reported revenue of $657 million, up from $226 million the previous year, with a narrowed loss of $863 million compared to $1.24 billion.
Despite the after-hours drop, Alphabet shares have surged 56% in the past year. Shares of Meta and Microsoft have also reached new highs, reflecting continued investor interest in tech stocks.
Paul Balo is the founder of TechBooky and a highly skilled wireless communications professional with a strong background in cloud computing, offering extensive experience in designing, implementing, and managing wireless communication systems.
To provide the best experiences, we use technologies like cookies to store and/or access device information. Consenting to these technologies will allow us to process data such as browsing behaviour or unique IDs on this site. Not consenting or withdrawing consent, may adversely affect certain features and functions.
Functional
Always active
The technical storage or access is strictly necessary for the legitimate purpose of enabling the use of a specific service explicitly requested by the subscriber or user, or for the sole purpose of carrying out the transmission of a communication over an electronic communications network.
Preferences
The technical storage or access is necessary for the legitimate purpose of storing preferences that are not requested by the subscriber or user.
Statistics
The technical storage or access that is used exclusively for statistical purposes.The technical storage or access that is used exclusively for anonymous statistical purposes. Without a subpoena, voluntary compliance on the part of your Internet Service Provider, or additional records from a third party, information stored or retrieved for this purpose alone cannot usually be used to identify you.
Marketing
The technical storage or access is required to create user profiles to send advertising, or to track the user on a website or across several websites for similar marketing purposes.