Entering text into the input field will update the search result below

Alphabet up after Q4 beat; paid clicks surge, big losses reported for "Other Bets"

Feb. 01, 2016 4:32 PM ETAlphabet Inc. (GOOG) StockGOOG, GOOGLBy: Eric Jhonsa, SA News Editor51 Comments
  • Alphabet/Google's (GOOG, GOOGL) Other Bets reporting segment, broken out by itself for the first time, had 2015 revenue of $448M (+37% Y/Y), and an operating loss of $3.57B (up from $1.94B in 2014). The segment's Q4 revenue totaled $151M (+42% Y/Y), and its op. loss $1.1B. Other Bets includes Google Capital, Google Fiber, Nest, Calico, and the Google X long-term R&D unit, among other things.
  • Core performance: Core Google (includes Google search, display ads, Maps, YouTube, and Android) had 2015 revenue of $74.5B (+13% Y/Y) and op. income of $23.4B (+23%). The segment's Q4 revenue rose 18% to $21.8B - Google sites revenue +20% to $14.9B, Google Network revenue +7% to $4.1B, other revenue (Google Play, hardware, etc.) +24% to $2.1B.

    Paid clicks (boosted by YouTube, mobile search, and Google Shopping) rose a strong 17% Q/Q (lifted some by seasonality) and 31% Y/Y - Y/Y growth accelerated sharply from Q3's 23% and Q2's 18%, and was well above expectations of 22-23%. Google sites paid clicks +40% Y/Y, Google Network clicks (hurt by competition and quality control efforts) +2%. Cost per click (ad prices) fell 5% Q/Q and 13% Y/Y, worse than expectations for a ~6% drop. Google sites cost per click -16% Y/Y, Google Network -8%.
  • Forex/TAC: Forex had a 600 bps impact on Q4 revenue growth (+18% Y/Y vs. +24%). Traffic acquisition costs were 21% of revenue vs. 22% a year ago.
  • Financials: $1.8B was spent in Q4 to buy back 2.4M shares. Operating expenses were 36% of revenue vs. 37% a year ago - R&D spend rose to $3.5B, sales/marketing to $2.7B, and G&A to $1.6B. Cost of revenue was 38% of revenue, same as a year ago. Boosting EPS: The effective tax rate was just 5%, down from 18% a year ago. Headcount rose 15% Y/Y to 61,814.

    Capex totaled $2.1B in Q4, and $9.9B over the whole of 2015 (down from $11B in 2014). Q4 free cash flow was $4.3B (up from $2.8B a year ago). Alphabet ended 2015 with $73.1B in cash (much of it offshore) and $5.2B in debt.
  • GOOG +5.1% after hours to $790.50. GOOGL +5.4% to $812.40. For now, Alphabet/Google has passed Apple to become the most valuable traded U.S. company.
  • Alphabet's Q4 results, PR, earnings release (.pdf)

Recommended For You

About GOOG Stock

SymbolLast Price% Chg
Market Cap
PE
Yield (TTM)
Rev Growth (YoY)
Prev. Close
Compare to Peers

Related Stocks

SymbolLast Price% Chg
GOOG--
Alphabet Inc.