ALPHABET INC. Alphabet Announces Fourth Quarter and Fiscal Year 2020 Results
MOUNTAIN VIEW, Calif. - February 2, 2021 - Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced financial results for the quarter and fiscal year ended December 31, 2020.
Sundar Pichai, CEO of Google and Alphabet, said: "Our strong results this quarter reflect the helpfulness of our products and services to people and businesses, as well as the accelerating transition to online services and the cloud. Google succeeds when we help our customers and partners succeed, and we see significant opportunities to forge meaningful partnerships as businesses increasingly look to a digital future."
Ruth Porat, CFO of Google and Alphabet, said: "Our strong fourth quarter performance, with revenues of $56.9 billion, was driven by Search and YouTube, as consumer and business activity recovered from earlier in the year. Google Cloud revenues were $13.1 billion for 2020, with significant ongoing momentum, and we remain focused on delivering value across the growth opportunities we see."
New reporting segment structure and operating results
We are now reporting results for three segments: Google Services, Google Cloud, and Other Bets. The following table presents segment revenues and operating income (loss) under our new reporting segment structure for the quarters ended December 31, 2019 and 2020 and the years ended December 31, 2018, 2019 and 2020 (in millions; unaudited).
Quarter | Fiscal Year | |||||||||||||
Q4 2019 | Q4 2020 | 2018 | 2019 | 2020 | ||||||||||
Revenues: | ||||||||||||||
Google Services | $ | 43,198 | $ | 52,873 | $ | 130,524 | $ | 151,825 | $ | 168,635 | ||||
Google Cloud | 2,614 | 3,831 | 5,838 | 8,918 | 13,059 | |||||||||
Other Bets | 172 | 196 | 595 | 659 | 657 | |||||||||
Hedging gains (losses) | 91 | (2) | (138) | 455 | 176 | |||||||||
Total revenues | $ | 46,075 | $ | 56,898 | $ | 136,819 | $ | 161,857 | $ | 182,527 | ||||
Quarter | Fiscal Year | |||||||||||||
Q4 2019 | Q4 2020 | 2018 | 2019 | 2020 | ||||||||||
Operating income (loss): | ||||||||||||||
Google Services | $ | 13,488 | $ | 19,066 | $ | 43,137 | $ | 48,999 | $ | 54,606 | ||||
Google Cloud | (1,194) | (1,243) | (4,348) | (4,645) | (5,607) | |||||||||
Other Bets | (2,026) | (1,136) | (3,358) | (4,824) | (4,476) | |||||||||
Corporate costs, unallocated(1) | (1,002) | (1,036) | (7,907) | (5,299) | (3,299) | |||||||||
Total income from operations | $ | 9,266 | $ | 15,651 | $ | 27,524 | $ | 34,231 | $ | 41,224 |
- Corporate costs, unallocated for fiscal year 2018 includes a fine of $5.1 billion and fiscal year 2019 includes a fine and a legal settlement totaling $2.3 billion.
For a description of our segments and unallocated corporate costs, refer to "Segment results" in this earnings release.
Q4 2020 financial highlights
The following table summarizes our consolidated financial results for the quarters ended December 31, 2019 and 2020 (in millions, except for per share information and percentages; unaudited).
Quarter Ended December 31, | ||||
2019 | 2020 | |||
Revenues | $ | 46,075 | $ | 56,898 |
Increase in revenues year over year | 17 % | 23 % | ||
Increase in constant currency revenues year over year(1) | 19 % | 23 % | ||
Operating income | $ | 9,266 | $ | 15,651 |
Operating margin | 20 % | 28 % | ||
Other income (expense), net | $ | 1,438 | $ | 3,038 |
Net income | $ | 10,671 | $ | 15,227 |
Diluted EPS | $ | 15.35 | $ | 22.30 |
- Non-GAAPmeasure. See the table captioned "Reconciliation from GAAP revenues to non-GAAP constant currency revenues" for more details.
Q4 2020 supplemental information (in millions, except for number of employees; unaudited)
Revenues, Traffic Acquisition Costs (TAC) and number of employees | |||||
The following table summarizes our revenues, total TAC and number of employees. | |||||
Quarter Ended December 31, | |||||
2019 | 2020 | ||||
Google Search & other | $ | 27,185 | $ | 31,903 | |
YouTube ads | 4,717 | 6,885 | |||
Google Network Members' properties | 6,032 | 7,411 | |||
Google advertising | 37,934 | 46,199 | |||
Google other | 5,264 | 6,674 | |||
Google Services total | 43,198 | 52,873 | |||
Google Cloud | 2,614 | 3,831 | |||
Other Bets | 172 | 196 | |||
Hedging gains (losses) | 91 | (2) | |||
Total revenues | $ | 46,075 | $ | 56,898 | |
Total TAC | $ | 8,501 | $ | 10,466 | |
Number of employees | 118,899 | 135,301 |
Change in the useful lives of our server and network equipment (unaudited)
In January 2021, we completed an assessment of the useful lives of our servers and network equipment and determined we should adjust 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. This change in accounting estimate will be effective beginning fiscal year 2021. For assets that are in-service as of December 31, 2020, we expect operating results to be favorably impacted by approximately $2.1 billion for the full fiscal year 2021. The effect of the change may be different due to our capital investments during the fiscal year 2021.
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Alphabet Inc. published this content on 02 February 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 February 2021 21:03:04 UTC.
