Google/YouTube parent Alphabet saw revenue jump last quarter driven by YouTube and search as advertising recovered. The giant company’s total sales surged to $56.9 billion for the last three months of 2020 from $46 billion the year before, smashing expectations.
YouTube ad revenue jumped to $6.9 billion from $4.7 billion last year and $5 billion last quarter. Google search and other advertising revenue was $31.9 billion, up from $27.2 billion the year before.
Closely watched Google Cloud revenues of $13 billion for 2020 and $3.8 billion for the quarter were in line with expectations with more details of the business provided for the first time. Cloud operating losses of $1.24 billion were a hair wider than $1.19 the year before. The sector is seeing a surge of growth and investor interest around what’s being called the “Cloud Wars” as Alphabet and Amazon both report numbers this afternoon. Google Cloud revenue is benefiting from the strong structural growth in sector demand.
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Cloud computing, web services that provide infrastructure linking sites and servers, gained public notice last month when Amazon Web Services, or AWS (the leader in the space, followed by Microsoft’s Azure) stopped supporting conservative social media site Parler after the violent insurrection at the U.S. Capitol. Underlining how key the sector is, Amazon announced this afternoon that Andy Jassy, who has led the potent AWS division, will take over as the company’s CEO from Jeff Bezos.
Separately, Google and Apple had removed Parler from their app stores. A week ago, YouTube indefinitely extended its ban of former President Donald Trump, who faces an impeachment trial next week in the Senate for inciting the Capitol rioters.
Earnings per share of $22.30 were also a beat — way up from consensus EPS of $15.90 and EPS of $15.35 in the year earlier quarter. Net income was $15.2 billion versus $10.7 billion.
“Our strong fourth quarter performance .. was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year,” said CFO Ruth Porat. “We remain focused on delivering value across the growth opportunities we see.”
Alphabet shares, which had been trading at historic highs before the numbers came out at market close, popped another 6.5% in after-hours trading.
On the ad front, brand advertising and connected TV remain catalysts for YouTube, while Google’s search and display ads are more mature businesses. The owner of the world’s largest search engine — with an estimated share of more than 90% globally, excluding China — is the target of an anti-trust suit by the U.S. Department of Justice.
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