By
Godfrey Benjamin
April 18th, 2024
Alphabet recently posted its fourth-quarter earnings which caps of a remarkable annual revenue run for the tech conglomerate.
Google parent company Alphabet Inc (NASDAQ: GOOGL) attained a new record for annual revenue last year, which grew 41% year-over-year (YoY) to $257 billion. This also marked the first time the multinational tech company would surpass $200 billion in revenue. Put in perspective, it is also about triple the amount of revenue realized just five years earlier in 2016.
For the fourth quarter of 2021, Alphabet reported revenue of $75 billion which represents a 32% YoY increment. Alphabet and Google chief executive officer Sundar Pichai weighed in on the earnings release with an accompanying statement which reads:
“Q4 saw ongoing strong growth in our advertising business, which helped millions of businesses thrive and find new customers, a quarterly sales record for our Pixel phones despite supply constraints, and our Cloud business continuing to grow strongly.”
Furthermore, Alphabet shares rose by more than 9% in extended trading. The company also recently announced a 20-for-1 stock split. This will go into effect in July.
Alphabet Q4 Revenue by the Numbers
Alphabet’s earnings per share (EPS) exceeded the general consensus with $30.69 earned versus $27.34 expected. In addition, the company’s revenue of $75.33 billion also surpassed analysts’ estimates of $72.17 billion. Advertising revenue from video streaming giant YouTube was below Wall Street’s estimates, with $8.63 billion versus $8.87 billion estimated. However, Google Cloud revenue came in at $5.54 billion, higher than the general consensus estimates of $5.47 billion. Alphabet also posted an operating loss of $890 million for the same Cloud division. Lastly, Alphabet’s traffic acquisition costs (TAC) clocked in at $13.43 billion versus $12.84 billion expected, according to StreetAccount.
Alphabet performed well despite ongoing issues with the global supply chain as well as lingering effects of Covid. For instance, Google, which is big on internet ads, experienced a massive influx of customers on its search engine. These consumers were looking for apparel and hobbyist items, according to Philip Schindler, Google’s chief business officer. In addition, Sophie Lund-Yates, equity analyst at Hargreaves Lansdown also touched on this trend, saying:
“The pandemic has handily accelerated the world’s reliance on digital advertising, sitting through traditional TV advert breaks or reading billboards suddenly feels completely archaic in the age of streaming and mobile phone addiction.”
As a result of this, it is little wonder that Google’s advertising revenue came in at a hefty $61.24 billion for the quarter. This represents an increment of 33% from the $46.2 billion for the same period a year earlier.
Alphabet 20-for-1 Stock Split
Once Alphabet’s planned 20-for-one stock split finally takes effect, investors will receive 19 additional shares for each one held. In addition, the split, which is subject to shareholder approval, will render the stock more affordable. Furthermore, this also makes it potentially eligible for inclusion into more market indexes. Alphabet’s stock split follows similar moves undertaken by Apple Inc (NASDAQ: AAPL) and Tesla Inc (NASDAQ: TSLA) in the last few years.