Google/Alphabet's call: Gmail users, paid clicks, 2016 capex, offshore cash discussed

Feb. 01, 2016 5:58 PM ETAlphabet Inc. (GOOG)GOOG, GOOGLBy: Eric Jhonsa, SA News Editor31 Comments
  • With strong mobile growth providing a lift, Gmail has topped 1B monthly active users, Alphabet/Google (GOOG, GOOGL) disclosed on its Q4 call. The e-mail service had 900M MAUs as of last May. Other Google offerings with 1B+ MAUs: Search, Android, YouTube, Maps, Chrome, and Google Play. (live blogs: WSJ, MarketWatch)
  • Regarding surging paid click volumes (up 31% Y/Y in Q4, with 40% growth on Google sites), Google once more mentioned the impact of YouTube's TrueView ad format - a video ad viewed from start to finish is considered a paid click. CFO Ruth Porat mentioned ad format changes served to lower ad prices and boost clicks, and declared both mobile and PC ad monetization to be healthy.
  • Porat urged analysts to look at the performance of Google's Other Bets segment - it had 2015 revenue of $448M and op. loss of $3.57B - on an annual basis rather than a quarterly one, and insisted Google is being efficient with its investments. Nest, Fiber, and the Verily life sciences unit are said to be the main revenue-generating parts of the Other Bets segment.
  • She added capex is expected to grow again 2016, after surprisingly dropping in 2015 to $9.9B (equal to 13% of revenue). In addition to Google's data center infrastructure, Fiber and other bets will be an area of focus for capex.
  • Also mentioned: 1) Spending from Google Play store buyers rose 30% in 2015. 2) U.S. revenue rose 24% Y/Y, and U.K. revenue (hurt some by a strong dollar) 16%. Forex had a $1.3B revenue impact, or $1B after factoring currency hedges. 3) Google is pushing for exclusive content for the YouTube Red subscription service. 4) ~$43B of Google's $73.1B cash balance is overseas.
  • GOOG +5.5% after hours to $793.00. GOOGL +5.4% to $812.00.
  • Google/Alphabet's Q4 results, Q4/2015 details

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