Alphabet Announces Fourth Quarter and Fiscal Year 2021 Results

It's not only psychological -- for example, a lot of brokerages don't offer fractional shares, so a split allows some retail investors to invest who couldn't afford to before. (Although that almost certainly has a smaller effect than the options contracts etc mentioned in sibling threads.)

bduerst• 4 years ago

Increased liquidity. Also option trading is usually in 100 share units, meaning retail investors can now afford more options (e.g. $15,000 vs $300,000 a unit).

mpalczewski• 4 years ago

This makes the stock price in line with other dow jones stocks, something that Apple did right before it was included in the Dow average. The Dow unlike other indices does not weight by market cap or anything like that it literally uses the stock prices.

endisneigh2• 4 years ago

Man, Google’s poor search results sure do pay well /s.

I wonder if Google will make any big acquisitions this year

NotAnOtter• 4 years ago

Google is many things, but poor search results is not one of them. Still the best search engine around, being too good is the problem most people have

sixothree• 4 years ago

Not in my day-to-day work. The deterioration is very clear.

jeffbee3• 4 years ago

Not sure if sarcasm or not. These results demonstrate that the HN zeitgeist about the utility of Google is not related to its actual utility to the public at large.

anonporridge3• 4 years ago

Most people want the lowest common denominator information. They want to know what most other people think and want.

HN and their desire for niche information is just not representative of the average human.

cobookman2• 4 years ago

Technically, revenue decline would be a lagging indicator of poor search results and poor user experience.

But agreed.

im3w1l2• 4 years ago

Product quality is a leading indicator of profit. If the HN perception is accurate, then it will be a problem in the long term.

Avalaxy• 4 years ago

This is very noticeable. I remember everyone here saying Atlassian was a sinking ship when they switched to cloud-only. Ever since, its stock has almost doubled. I can probably think of a pretty big list of other things where HN hivemind completely misaligns with how 90% of the normal population thinks.

detaro• 4 years ago

Doesn't really follow. a) Google is a lot more than search and b) it's not like people noticing "crap, search results are getting worse" suddenly stop using it entirely, given there is no clearly superior competitor. Similarly with many other products.

purple_ferret2• 4 years ago

Really amazing how much money they keep squeezing out search

But it's basically impossible to escape the ads on it these days, so it's not surprising.

mrfusion• 4 years ago

Out of broken search actually. Pretty amazing.

tryptophan• 4 years ago

t it's basically impossible to escape the ads on it these days, so it's not surprising

ublock origin seems to do fine.

Unless you are suggesting that the ad-ladden SEO'd pages are their real product?

purple_ferret2• 4 years ago

Even with ublock I'll stumble into a google ad for when I search for something like a restaurant or hotel

daitangio• 4 years ago

Also PiHole is a great tool. I suggest it it you Walt a very good ads shield :)

riku_iki4• 4 years ago

Can you use ublock when searching on android or iphone?

paulpauper5• 4 years ago

Not just search. it is the entire internet, save for Facebook's properties and few others. huge.

kevan2• 4 years ago

adjusted the estimated useful life of our servers from three years to four years and the estimated useful life of certain network equipment from three years to five years

Another sign of the slowing advancement in CPU power/performance?

jeffbee3• 4 years ago

The 3-year figure was always totally unhinged from the actual useful life of cloud servers. As evidence, please refer to the fact that on EC2 you can still provision a C4 instance with a Haswell CPU made in 2014. In GCE you can still provision an N1 instance with a Sandy Bridge CPU from 2012.

kevan2• 4 years ago

Disclaimer: I'm at Amazon but not in AWS

Fair, I was thinking of this in the non-cloud perspective where efficiency improvements can push you to upgrade even if the hardware still works. In cloud provider mode it makes sense to keep it around as long as it still works and it's not too annoying to run. It doesn't really matter how (in)efficient the hardware is because you set the pricing to keep it profitable as long as someone's willing to buy it.

jthirkle• 4 years ago

But is anybody actually doing that?

maattdd• 4 years ago

Google Cloud revenue is only up 30% YoY, which seems really low considering the marketing and the focus on it (and the growth of the competitors).

strstr• 4 years ago

Not sure if this is really much different, but superficially it looks like its up ~45% (5.5 billion from 3.8)

onlyrealcuzzo2• 4 years ago

To put that into perspective - if the rate continues for 4 years (doesn't seem that unbelievable) - revenue would be ~$24Bn - which is close to FB currently...

anonporridge3• 4 years ago

Anyone have handy YoY growth numbers for AWS and Azure?

jedberg• 4 years ago

AWS was 39% at their last report.

blakesterz• 4 years ago

I don't know how many others think like I do, but I'd never use GCP. No one will ever convince me that it'll be around in 5 years. I just don't trust them to keep anything they made in the past decade or so going long term. Call me paranoid, call me whatever you want, but I just do not trust their ability to focus on anything anymore.

losteric• 4 years ago

GCP is a profit center and diversifies the business, why would Alphabet deprecate it?

ramoz• 4 years ago

Google will have stake in the game.

https://www.datacenterdynamics.com/en/news/google-to-migrate...

guyzero• 4 years ago

GCP is making 10-year sales deals, so it better be around in 5 years.

https://redmonk.com/jgovernor/2020/07/31/google-clouds-expan...

"GCP has recently announced a number of ten year transactions including wins at Deutsche Bank, Mayo Clinic, and Sabre."

sytelus• 4 years ago

I am more surprised by having such stunning growth by many big tech without actually having any new businesses. It used to be that 10% growth was a lot and now people scoff at even 30%.

KptMarchewa• 4 years ago

This is not 100% new business. It displaces existing one - on-premises, company owned datacenters and colocations. Just as electric cars are growing fast because they are eating into ICE market.

carlycue• 4 years ago

To put Alphabets revenue this quarter ($75 billion) in perspective:

Microsoft: $51.7 billion

Apple: $123.9 billion.

bluedino• 4 years ago

More perspective (estimates):

Meta $33.4 billion

Amazon $134 billion

megablast• 4 years ago

Revenue??

mupuff12342• 4 years ago

I think operating income is probably a better metric to look at to compare.

Walmart has a higher revenue than all of the above (~140 billion)

im3w1l2• 4 years ago

Can you explain why operating income is better and why you are bringing up walmart?

CobrastanJorji2• 4 years ago

Perspective is weird with large amounts of money. I think human brains are just not good at big numbers. You need something to compare it to, and the big numbers of other companies still leave it completely abstract.

Perhaps it might work better with a comparison to a person, like "Alphabet made so much revenue this quarter that, assuming they had no expenses, after a full year, Alphabet would have roughly as much money as Elon Musk." But maybe not, because now you've just moved the problem to understanding how rich Elon Musk is.

klelatti2• 4 years ago

One perspective:

Roughly 10c of revenue for every person on the planet every day.

woah• 4 years ago

It's much harder to understand how rich Elon Musk is, because if he tried to sell even a small percentage of his Tesla shares, the value would evaporate. The revenue figures of these companies are more understandable because that is cold hard cash coming in the door

tech-historian• 4 years ago

More perspective.

Apple: founded in 1976 (46 years old)

Microsoft: 1975 (47 years old)

Google: 1998 (24 years old)

riku_iki4• 4 years ago

iphone earns 100B

pixel earns 100M..

carlsborg• 4 years ago

Summary: Full year 2021 revenue $257B, 41% year on year growth. Net income $76B, up from $40B yoy.

Quarterly: Q4 of 2021 they made $75B revenue, most of it came from Google Search, $43B up from $31.9B in Q4 2020. Youtube $8.6B of ads, Google Network $9.3B from ads.

Google cloud did $5B revenue for the quarter, up from $3.8B in Q4 2020. It lost $890m this quarter compared to $1.2B Q4 2020. "Other Services" did $8.1B revenue and "Other bets" did $181B

They have ~$140B in cash and liquid investments.

tester756• 4 years ago

and "Other bets" did $181B

you're sure?

throwaway0220• 4 years ago

$181M, not B.

oezi• 4 years ago

I think your math on that €43B up is wrong. At least it would be strange if they more than doubled search from last year's Q4, but just grew 41%.

jsnell• 4 years ago

You are misreading; it is not up by 43 but up to 43. (No math involved, the numbers are straight from the first table in the pdf)

panarky5• 4 years ago

It's one thing for a midsize company to grow revenue 41% but for a massive global corporation with 156,000 employees to do it is nothing short of astounding.

And this giant, mature company isn't sacrificing margins for top-line growth, they're actually increasing margins at the same time.

Truly breathtaking.

option• 4 years ago

They earned their monopoly position.

kccqzy• 4 years ago

It's like they have a knob that they can turn: turning it to the left means fewer ads and a better user experience, and turning it to the right means more ads and more revenue.

My own experience from Search and YouTube is that they have massively turned the knob to the right. I don't know why they are chasing revenue growth with such craze. It makes me worried that the leadership don't know what's Alphabet's next big thing so they are just milking the cow while they can.

ksec• 4 years ago

Up ~10% after market. Should be around 2T Market Cap now. Apple is 2.8T while M$ is 2.3T.

I think I am very good at numbers, comparatively speaking. But these number is till mind boggling. It is hard to comprehend how and why they could continue to grow. With $140B cash while Android is still half polished. GCP not competing. And killing half a dozen random products and services from time to time.

brink• 4 years ago

The pandemic seems to have been very profitable for big tech, for both money and power.

cbaleanu• 4 years ago

Please mark as [pdf]

joanfihu• 4 years ago

I’m wondering if growth is just synthetic at this point. They can just add more ads regardless of user growth.

There has been a noticeable increase in ads across all their products.

qiskit• 4 years ago

Growth is primarily due to demand - by advertisers, not the users. Online ad spending increased during the pandemic and is expected to continue to grow throughout this decade. Advertisers flush with cash are looking to spend it online. And google, fb, etc are more than happy to oblige. Google is simply increasing the supply ( ads ) to meet the demand ( advertisers ). This sadly means we'll be seeing more and more ads online...

riku_iki4• 4 years ago

Growth is primarily due to demand - by advertisers, not the users.

It is actually both, from q3 10k:

Paid clicks change: 24% Cost-per-click change: 17%

darkwizard42• 4 years ago

Also, the margins are getting better, through more ad sales and less costs (price per ad in a super rudimentary way is higher)

see riku comment for more

paulpauper5• 4 years ago

They don't even need growth. Their earnings and profit margins are high enough that they can deliver billions of dollars of value every quarter to shareholders absent of growth.

summerlight• 4 years ago

This is one of significant misconception for digital marketing. More ads doesn't necessarily mean more revenue since it's bound by total advertising budget. Let's assume an optimal ads market and you put more ads there without further optimization or budget, then there will be less auction pressure per ads (thus less CPM) and roughly similar revenue. For something like 40% YoY growth at Google's scale, you need to convince big advertisers to allocate more budgets.

lvl100• 4 years ago

In terms of investments, I like Google the most out of the monopoly techs. Microsoft is my least favorite because they’re just a fund of loosely related technologies at this point.

paulpauper5• 4 years ago

This is the closest thing to investing in Renaissance Technologies. It's too bad there is not a way to get 2-3x leverage version of google. The CAGR since its IPO in 2004 is the same as Renaissance too. Rather than executing millions of trades, the profit is from millions of clicks. Like renaissance , massive statistical analysis is involved, such as tracking click patterns and optimizing the ads.

There is no limit to how high this will go. More and more economic activity is being funneled into these dozen or so mega-tech companies, which is how they are able to grow annual revenues at 20-40%/year despite 3% GDP growth.

timbeccue• 4 years ago

Margin or options would give you leveraged exposure.

paulpauper5• 4 years ago

not as good. margin has high borrow fees and path dependency. options are better but still has a lot of fees, slippage, and needs to be adjusted to target appropriate delta. a 3x fund would make it so much easier and cheaper.

skybrian2• 4 years ago

It seems like there should be a limit to the ad market, though? Also, isn't increasing ad blindness a thing? (Even without ad blockers.)

tonyedgecombe2• 4 years ago

I remember reading a paper from LSE that showed that advertising tended to crowd out investment in R&D and that in the long term increased advertising has a detrimental effect on the whole economy.

potiuper• 4 years ago

FNGO & FNGU

paulpauper5• 4 years ago

only has 10% exposure to google.

sidcool• 4 years ago

It's mind boggling to me that Google is still losing money on GCP. It's been years. And AWS and Azure are minting money. Any reason why?

gpapilion• 4 years ago

Google is buying business and is happier to give discounts(sustained use pricing for example).

Jensson• 4 years ago

Amazon and Microsoft uses AWS and Azure themselves. Google doesn't use GCP, the service you buy is not the service Google engineers use internally. This both means that GCP cannot bill the rest of Google to inflate their own numbers and that GCP likely are less battle tested since they don't have a huge internal customer.

tonyedgecombe2• 4 years ago

Also there seems to be a widespread perception among developers that Google will drop services on a whim. Whether it's true or not that has to have an impact on people signing up to their services.

ripvanwinkle• 4 years ago

Azure doesn't mint money. If you look closely at any numbers MSFT reports whenever Azure is part of the mix, the margins drop considerably though revenue growth jumps. I had looked closely at their reports about a year ago.

Azure is usually bundled with some very profitable if stagnant pieces like Windows Server or SQL Server when reported on. You never see pure Azure numbers.

Alphabet Announces Fourth Quarter and Fiscal Year 2021 Results

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