Google's Q4 numbers suggest strong Pixel sales

Constantly under scrutiny by the DOJ, Google's parent company Alphabet just reported its fourth quarter numbers and these are also under scrutiny but by Wall Street. Fourth quarter revenue rose 13% year-over-year to $86.31 billion compared to the $76.05 billion that Alphabet reported during the same quarter in 2022. For all of 2023, the company took in $307.39 billion which was a 9% increase from the $282.84 billion that the firm generated in 2022.

Google Search revenue increased 12.7% to $48.02 billion while YouTube revenue did even better with a 15.5% increase to $9.20 billion. Overall advertising on Google rose to $65.52 billion, an 11% increase on an annual basis. Subscriptions, platforms, and devices (which includes Android, Pixel phones, tablets, smartwatches, and true wireless earpods) took in $10.79 billion which was a string 22.7% increase from Q4 2022. This suggests that Pixel sales did very well during Q4 which included the release of the Pixel 8 series.

Google's Cloud Services had a strong quarter with revenue rising to $9.19 billion for a 25.7% increase. And it cost Google 8.2% more for online traffic as the company spent $13.99 billion during the quarter on traffic acquisition costs. The number of employees at Alphabet took a hit, shrinking 4.1% to 182,502 from 190,234 during the same quarter in 2023.

Alphabet and Google CEO Sundar Pichai said, "We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come." Google's Gemini is its family of multimodal large language models made up of Gemini Ultra, Gemini Pro, and Gemini Nano. They work with text, images, audio, videos, and code.

Net income was $20.89 billion during Q4, a 52% year-over-increase. Likewise, earnings per share rose 56.2% to $1.64 from the $1.05 reported for Q4 2022. For all of 2023, Alphabet had net income of $73.80 billion which was up 23.05%. Earnings per share for all of 2023 was up 27.2% to $5.80 per share. It seemed like a great earnings report except for one item which led investors to dump their Alphabet shares.

Wall Street was expecting Google's Q4 ad revenue to be $65.8 billion instead of the $65.52 billion reported; that one miss was enough to cause the stock to crater. After the report was released, in after-hours trading Alphabet shares declined $8.54 or 5.58% to $144.51.