- Alphabet beat on the top and bottom lines for the fourth quarter.
- The stock jumped in extended trading after the report.
- The company also announced a 20-for-1 stock split.
Google parent Alphabet reported better-than-expected fourth-quarter earnings and revenue. Shares popped more than 9% in extended trading.
The company also announced a 20-for-1 stock split that will go into effect in July.
Get Boston local news, weather forecasts, lifestyle and entertainment stories to your inbox. Sign up for NBC Boston’s newsletters.
Here are the key numbers:
- Earnings per share (EPS): $30.69 vs $27.34 expected, according to Refinitiv
- Revenue: $75.33 billion vs $72.17 billion expected, according to Refinitiv
- YouTube advertising revenue: $8.63 billion vs. $8.87 billion expected, according to StreetAccount
- Google Cloud revenue: $5.54 billion vs $5.47 billion expected, according to StreetAccount
- Traffic acquisition costs (TAC): $13.43 billion vs. $12.84 billion expected, according to StreetAccount
Alphabet reported revenue growth of 32%, proving again that it was able to withstand the pressures from the pandemic and inflation.
The results follow a year of outperformance. The stock surged 65% last year, beating all other Big Tech companies and more than tripling gains in the S&P 500.
Google's advertising revenue came in at $61.24 billion for the quarter, up 33% from $46.2 billion in the same period a year earlier.
Philipp Schindler, Google's chief business officer, said retail was the largest contributor to year-over-year ad growth. Media and finance spending was also significant.
YouTube ad revenue was the only metric that fell short of analysts expectations. The company has been trying to challenge TikTok with a service called Shorts. Alphabet CEO Sundar Pichai said the company has more than 15 billion daily active views globally. That metric is unchanged from his last update in July 2021.
The company's cloud reported revenue growth of 45% to $5.54 billion. Operating loss in cloud came in at $890 million during the quarter, which narrowed from the $1.14 billion loss a year ago. However, it expanded from third quarter, when the unit lost $644 million.
Alphabet's backlog increased more than 70% to $51 billion, primarily consisting of the cloud business, Pichai said on the earnings call. He added that the company saw 65% year-over-year growth in the number of cloud deals worth over $1 billion.
Revenue for the company's Other Bets umbrella, which includes the self-driving car unit Waymo and life sciences unit Verily, came in at $181 million — down slightly from a year ago.
Google's other revenue segment, which includes hardware, Play Store, and non-advertising YouTube revenue, notched $8.16 billion in sales, up from $6.67 billion the year prior. Pichai said the company saw an "all-times sales record" for its Pixel smartphone despite supply chain constraints.
Traffic Acquisition Costs (TAC), the metric used to show how much the company pays other websites to acquire traffic, came in higher than Wall Street expected at $13.43 billion.
Google added nearly 6,500 full-time employees to its headcount, CFO Ruth Porat said on the call. The total headcount sits at 156,500 full-time employees. Porat said the company expects that same pace of growth in future quarters.
In splitting its stock, Alphabet is following moves by Apple and Tesla in the last couple years.
The split doesn't change the fundamentals of the business. Rather, it will lower the price of each share, a move that companies often make when their stock trades in the thousands of dollars. Were the split to happen as of Tuesday's close, the cost of each share would go from $2,752.88 to $137.64, and each existing holder would get 19 additional shares for every one they own.
Alphabet shares started the year in a tailspin, dropping 6.6% in January as Wall Street sold out of tech stocks. However, with the after-hours gain, Alphabet has turned positive for the year.
Correction: An earlier version of this story incorrectly used the phrase daily active users instead of daily active views.
WATCH: Google and Meta report earnings soon, here's what to expect