Google’s Parent Alphabet Sees Shares Soar After Reporting Impressive Results For Its Fourth Quarter

Alphabet, Google’s parent company, has reported its fourth-quarter earnings and the tech titan surpassed the expectations of analysts in all categories except its Youtube ad revenue category which failed to meet the expectations of analysts.

Alphabet reported earnings per share of $30.69 beating the expected figure of $27.35 from analysts, according to Refinitiv. For revenue, the tech giant realized $75.33 billion, surpassing $72.17 billion estimated by analysts, according to Refinitiv. For its YouTube ad revenue category, analysts estimated $8.87 billion which the company failed to meet. Alphabet reported $8.63 billion for YouTube advertising revenue. Google Cloud revenue stood at $5.54 billion surpassing $5.47 estimated by analysts, according to StreetAccount. Traffic acquisition costs (TAC) expected by analysts according to StreetAccount was $12.84 billion and the company reported $13.43 billion.

With revenue growth of 32 percent, Alphabet was able to rise above the challenges that came as a result of the Coronavirus pandemic and inflation. The company’s results come with an overall impressive year. Last year, Alphabet’s stock surged as much as 65 percent, surpassing other Big Tech giants and tripling gains in the S&P 500.

Up 33 percent from $46.2 billion in the same period a year ago, Google’s advertising revenue stood at $62.24 billion for the quarter. According to Chief Business Officer Philipp Schindler, retail contributed the most to Google’s YoY ad growth with media and finance also playing significant roles.

Generally, the quarter was an impressive one. The only disappointing aspect of Alphabet’s earnings was YouTube ad revenue which fell below expectations. Of late, YouTube has seen steady competition from other rivals especially TikTok, and the company is trying to take on TikTok by launching its short video service called shorts, which according to Sundar Pichai (Alphabet’s CEO) has over 15 billion daily active users worldwide. It is important to know that this hasn’t changed from the last time he updated the public about this metric in July 2021.

The company’s cloud category grew 45 percent to $5.54 billion. For the quarter, operating loss stood at $890 million compared to $1.14 billion from the previous year. The company’s CEO also added that Alphabet’s backlog, which primarily is made up of its cloud business, grew by over 70 percent to $51 billion. He also added that Alphabet witnessed 65 percent YoY growth in its number of cloud deals which are worth over a billion dollars.

The company’s Other Bets category which houses its self-driving car unit called Waymo and its life sciences unit Verily, recorded revenue of $181 million. The figure is a little down from the previous year.

Google’s Other Revenue category which covers hardware, Play Store and non-advertising YouTube revenue ran up to $8.16 billion in sales and is up $6.67 billion from the previous year. CEO Sundar Pichai said the company saw an “all-times sales record” for its Pixel smartphone despite supply chain constraints.

During the period, Google also added almost 6,500 full-time employees, bringing its total headcount to 156,500 full-time employees, according to CFO Ruth Porat.