Alphabet reports Q4 revenue up 1% YoY to $76B, net income down 34% YoY to $13.6B, Google Cloud revenue up 32% YoY to $7.3B, and employees up 22% YoY to 190,234
up 32% YoY. It also cut its losses significantly, from $890M to $480M. https://www.cnbc.com/... Anthony DeRosa / @anthony : Alphabet earnings: MISS on both top and bottom. The company's stock dropped as much as 6% after hours, erasing much of the 7.28% it gained in normal trading hours. $GOOGL https://www.cnbc.com/... https://twitter.com/... @thetranscript_ : 6. Like $META, $GOOG is focused on Shorts monetization: “.viewership is growing rapidly $50B+ daily views up from $30B+ last spring. We're pleased with our continued progress in monetization: closing gap b2n short & long form is a big priority for us” https://twitter.com/... Matt Rosoff / @mattrosoff : Ruth Porat tells @dee_bosa that Alphabet $GOOGL is “meaningfully slowing” the pace of hiring in an effort to deliver long-term profitable growth: https://www.cnbc.com/... Bruce Lambert / @bruce_lambert : @Techmeme A company that makes more than $1 billion per *week* in profit sees the need to lay off thousands. Ahh, America. Barry Schwartz / @rustybrick : Google Ad revenue down 3.6% - yes, DOWN while total revenue up only 1% https://twitter.com/... https://twitter.com/...
Alphabet
Context & Ripple Effects
Alphabet entered this quarter with advertising revenue declining while headcount had expanded sharply, making Google Cloud's faster growth and narrower losses the clearest counterweight to weaker group profitability. Subsequent coverage shows Cloud continuing to expand, including $8.03B in Q2 2023 revenue, while investor attention later focused sharply on a Q3 cloud-sales miss.
By 2024, Alphabet was reporting both higher Cloud revenue and lower headcount, including $9.2B in Q4 2023 Cloud revenue alongside a headcount reduction. That sequence makes this quarter an early marker of the shift from staffing-led expansion toward extracting more operating leverage from the cloud business.
First-order effects
Google Cloud's revenue growth and loss reduction give Alphabet a growing profit lever even as Google advertising revenue declines and consolidated net income falls.
Alphabet's 190,234-person workforce raises the near-term cost base against only 1% revenue growth, increasing pressure on management to translate Cloud growth into group-level earnings improvement.
Second-order effects
GOOGL investors are likely to weigh Cloud's improving economics against the advertising slowdown and rising headcount, a tension reflected later when a cloud revenue shortfall drove a sharp share-price reaction.
Google Cloud's improving loss profile puts greater pressure on cloud rivals to demonstrate that their own revenue growth can support operating leverage rather than prolonged investment losses.
Third-order effects
Alphabet's later combination of expanding Cloud revenue and lower headcount points to a broader compute monetization pivot: large platforms are being judged increasingly on whether infrastructure growth converts into earnings rather than merely scale.
If advertising growth remains uneven, Cloud becomes more central to Alphabet's earnings mix, concentrating investor scrutiny on cloud growth rates and the cost discipline required to sustain them.
The trend: Alphabet is moving from workforce-fueled expansion toward a model in which cloud growth and operating efficiency must offset volatility in advertising.
Our response to Google's earnings call today below. It's clear that Google has debunked its own rationale for laying off 12,000 of our coworkers. Our colleagues did not need to lose their livelihoods. https://twitter.com/...
Apple revenue down -5% year over year (iPhone -8%), Microsoft up only +2% (Windows & Devices -39%) and Google ads revenue down -4% (overall revenue +1%) shows that while big tech did have a hard year in 2022 there was little correlation between revenue woes and layoffs.
$GOOG earnings. Making Lambda AI available next few weeks. Bringing LLM to Gmail, etc. Been awhile since we have seen GOOG trailing and chasing $MSFT. But youtube shorts @ 50 B daily views is 🚀.
Alphabet had a number of misses on expectations. YouTube revenue was down -8% year over year, search revenue down -2% and a similar loss on investments like Amazon & Rivian of about $1.5B. Only bright spot was Google Cloud growing 32% (also a miss) https://www.cnbc.com/...
Spoke to #Alphabet CFO Ruth Porat on disappointing $goog earnings Interesting that despite laying off 12000 #Google parent still hired almost 3500 in the holiday period 👇 #googlelayoffs #technology #SiliconValley https://twitter.com/...
On Alphabet's Q4 earnings call right now, CEO Sundar Pichai said, “We are just at the beginning of our AI journey, and the best is yet to come.” • People will be able to interact w/ Google's most powerful models “very soon.” • Google plans to bring LLMs to Gmail & Google Docs
$GOOG 4Q'22 Update “More than 6 years ago, I first spoke about Google being an AI-first company” Given the hype of AI and speculation of AI being potentially Achilles heel of Google Search and its economics, AI was predictably a huge focus on this call. Here's my highlights
6. Like $META, $GOOG is focused on Shorts monetization: “.viewership is growing rapidly $50B+ daily views up from $30B+ last spring. We're pleased with our continued progress in monetization: closing gap b2n short & long form is a big priority for us” https://twitter.com/...
Ruth Porat tells @dee_bosa that Alphabet $GOOGL is “meaningfully slowing” the pace of hiring in an effort to deliver long-term profitable growth: https://www.cnbc.com/...
Google's Cloud business was a bright spot in an otherwise disappointing fourth quarter. The unit brought in $7.32 billion — up 32% YoY. It also cut its losses significantly, from $890M to $480M. https://www.cnbc.com/...
Alphabet earnings: MISS on both top and bottom. The company's stock dropped as much as 6% after hours, erasing much of the 7.28% it gained in normal trading hours. $GOOGL https://www.cnbc.com/... https://twitter.com/...