Alphabet earnings show Google Cloud on $10B run rate
Today after the bell, Alphabet reported its fourth-quarter and full-year financial results. The company’s revenue grew from $39.3 billion in 2018 to $46.1 billion in 2019. The firm’s net income also expanded from $8.9 billion to $10.7 billion over the same time frame.
The figures, when compared to expectations, were mixed. Alphabet beat analyst estimates on profit, but missed on revenue. Shares of the company are off around 4% in after-hours trading, following its disclosure.
Why do we care?
The company’s reported Q4 and full-year 2019 results are notable for several reasons. First, Alphabet broke out the value of YouTube’s advertising empire. And, the company disclosed discrete “Google Cloud” revenues. Both are new.
YouTube’s advertising heft was made clear today, with the video platform bringing in $15.1 billion in 2019 revenue, up from $11.2 billion in 2018.
The firm’s new “Google Cloud” line item appears to include all of the company’s cloud computing efforts. YouTube’s advertising haul will grab the most headlines, but the cloud revenue figure is what we’d like to drill into.
Cloud, Google-style
Google announced an impressive $2.6 billion round for all cloud revenue, which includes G Suite, the enterprise version of GMail/Docs/Drive/Hangouts and Google’s cloud infrastructure revenue. At $2.61 billion, that puts it on a run rate over $10 billion. In the year-ago Q4, the company’s Cloud revenue came to just $1.71 billion, a run rate of $6.84 billion.