The parent company of Google has reported its fourth quarter earnings. The figures beat the expectations of analyst and is evidence that the company is recovering well after the slowdown in the second quarter of the year.
The company had earnings figures at $22.30 per share, adjusted versus the expectations of analysts that laid at $15.90 per share. Analysts expected revenue figures to be around $53.13 billion but the figures for revenue was $56.90 billion. Earnings from Google cloud was $3.8 billion as against the $3.81 billion speculated by analysts. YouTube ads made $0.79 billion dollars more than analysts projected bringing figures for YouTube ads to $6.89 billion. Traffic acquisition costs (TAC) was $10.47 billion against $9.32 billion speculated by analysts.
Alphabet’s revenue growth stood at 23% for the fourth quarter of 2020. In 2019, the figure stood at 17% which shows that Alphabet had a better fourth quarter in 2020 and that it is doing well recovering from the effects of the pandemic which caused a slowdown in the year especially in the second quarter of the year.
YouTube ads earnings in the fourth quarter of 2020 stood at $6.89 billion. In the last year, it was only $4.72 billion. This means a 46% positive shift within a year. According to Google’s Chief Business Officer; Philip Schindler, Google now reaches more 18–49 year olds than all linear TV networks put together and more than a hundred million people stream YouTube from their TVs.
In 2019, Q4 earnings for revenue was $39.93 billion and grew by 22% to $46.20 billion in the fourth quarter of 2020. These figures are still shocking to analysts because they expected advertisers to reduce their spending on adverts drastically and at first (especially in Q2) this was the case but they went back to spending soon enough.
Alphabet lost $1.24 billion in Q4 and $5.61 billion in the full year from its cloud business thus indicating that the cloud business is still in its investment phase. Sundar Pichai, CEO of Google and Alphabet said he was very pleased with the progress and the company would continue to make disciplined investments to scale up business and increase profitability. He also added that the company’s cloud business secured several billion dollar deals in 2020. ‘Other Revenue’s for Google stood at $6.67 billion in 2020. The figure was $5.26 billion in Q4 of 2019. The year 2020 was an impressive year for Alphabet filled with comebacks and breaking of speculations.