February 1, 2016 Last Updated 4:01 pm

Google parent reports revenue up 18% in strong Q4 earnings report

Google segment revenue rises as ad dollars continue to flow to its properties, but aggregate cost per click was down 13 percent, down 16 percent on Google websites

The search and advertising giant Google, oops make that Alphabet, reported very strong revenue growth in its fourth quarter earnings report. Total revenue rose 18 percent with advertising remaining very strong. Talking out currency fluctuations, revenue rose 24 percent.

alpha-flag“Our very strong revenue growth in Q4 reflects the vibrancy of our business, driven by mobile search as well as YouTube and programmatic advertising, all areas in which we’ve been investing for many years. We’re excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people,” said Ruth Porat, CFO of Alphabet.

The strong earnings report led to investors taking the stock, still trading under its old symbol of GOOGL, about 5.5 percent higher in after hours trading.

Alphabet is now reporting its earnings using two segments: Google and Bets. The first one is obvious, but the second is the collection of eight projects, some of which the company likes to call moonshots, though also includes units like Nest. Revenue for these are much lower, and they also show the cost of these project, showing a loss of $3.5 billion.


Google reported $74.5 billion in revenue for fiscal year 2015, while the Bets segment recorded $448 million.

As a point of comparison, Alphabet’s annual revenue was roughly equal to Apple’s Q1 (holiday season) revenue. Nonetheless, investors are cheered by today’s earnings report from Google’s parent, while expressing a bit of fear following Apple’s earnings release last week.

Because of this, Google is now the more valuable company based on share value: Alphabet’s combined share classes are now worth about $568 billion, while Apple has a value of about $535 billion.

One worrying element that investors might eventual see as Google’s dar cloud might be the continuing decline in cost per click: aggregate cost per click was down 13 percent, and down 16 percent on Google websites.

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