Alphabet reports Strong Quarter, but Ad Revenue falls short of expectations

Alphabet, the parent company of Google, today reported the financial results for the fourth quarter of 2023. Revenue rose 13% to $86.31 billion, beating analysts' expectations of $85.33 billion.

However, ad revenue, which accounts for the majority of Alphabet's revenue, came in at $65.52 billion, slightly below analysts' expectations of $65.94 billion.

Despite the miss on ad revenue, Google's overall results were impressive. Net income jumped 52% to $20.7 billion, or $1.64 per share, from $13.6 billion, or $1.05 per share, a year earlier. Operating margin, the profit left after subtracting costs to run the business, expanded to 27% from 24%.

Google Cloud, the company's cloud computing business, continued to grow, with revenue rising 26% to $9.19 billion. Google Cloud is the third-largest cloud computing provider, behind Amazon Web Services and Microsoft Azure.

Other Bets, a segment that includes Google's experimental projects such as Waymo and Verily, reported revenue of $657 million, up from $226 million the year prior. Its loss narrowed to $863 million from $1.24 billion.

In a statement, Alphabet CEO Sundar Pichai said, "We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation."

Key takeaways from Alphabet's earnings report

• Google's overall business is doing well, with strong growth in revenue and profit.
• Ad revenue came in slightly below expectations, but it is still a major driver of Google's growth.
• Google Cloud is continuing to grow and is now the third-largest cloud computing provider.
• Other Bets is narrowing its losses, but it is still a long-term investment.