Alphabet’s net profit jumped nearly 43 per cent year-on-year in Q4 2020, propelled by a ramp in advertiser spending across its YouTube and Search platforms.
On an earnings call, CFO Ruth Porat called the period a “great end to a challenging year”, adding “each component of our advertising revenues reflects the return of advertiser spend in response to the continued movement of consumer activity online”.
Net income hit $15.2 billion on revenue of $56.9 billion, up 23.5 per cent.
Operating profit increased 69% from $ 9.26 billion to $ 15.65 billion over the same period. For the full year, Alphabet reported a 20.4% increase in net income from $ 34.2 billion to $ 41.2 billion and a 12.8% increase in revenue from $ 162 billion to $ 183 billion.
Advertising revenue increased 21.8 per cent to $46.2 billion, with Google Search contributing $31.9 billion and YouTube $6.9 billion.
Google Cloud revenue grew 46.5 per cent to $3.8 billion, though in a first-time disclosure Alphabet noted the unit posted an operating loss of $1.2 billion. Porat said this was “essentially flat” and reflected investments in the division’s go-to-market organisation, engineering and technical infrastructure.
Sales from its Other segment (comprising hardware, cloud services and its Play Store) increased 26.8 per cent to $6.7 billion. Porat said Fitbit revenue will be included in this unit in future after an acquisition was sealed last month.
Porat said Play Store app revenue “continued to benefit from elevated levels of engagement, reflecting increases in active buyers and spend per buyer due to” Covid-19 (coronavirus).
Revenue at its Other Bets division, including Waymo, increased from $172 million to $196 million.
