Google’s parent company Alphabet Inc. (NASDAQ: GOOG) announced strong financial results for the fourth quarter and full year ended 31 December 2015.
Alphabet’s overall revenue for the quarter increased 18% year-on-year or 24% on constant currency basis, to US$21.3 billion. Operating margins improved 25% during the last quarter, enhanced by the holiday season. Subsequently, Alphabet’s net income for the quarter was recorded at US$49 billion and the diluted EPS improved from $6.79 per share to $7.06 per share, year-on-year.
Alphabet’s revenues from the US increased 20% year-on-year, while they increased 16% in the UK and the rest of the world rose 12%. The company’s net income for FY15 was recorded at $163 billion, which a 15.6% increase on the previous year.
Alphabet divided its overall performance under two segments, whereby it has reported Google as a separate segment and represented all other businesses under ‘Other Bets’ .
Google earned $74.5 billion in revenue for the twelve months, which is a 13.6% increase on 2014. The company’s operating income rose 23.5% for the full year, to $23.4 billion. On the other hand, while the revenue earned from Other Bets increased 37%, to $448 million, the segment posted an operating loss of US$3 billion. Capital expenditure on Google decreased from $11 Billion to $8.8 billion in FY15, while it increased from $500 million to $870 million for Other Bets.
Alphabet’s CFO, Ruth Porat commented on the results: “Our very strong revenue growth in Q4 reflects the vibrancy of our business, driven by mobile search as well as YouTube and programmatic advertising, all areas in which we’ve been investing for many years. We’re excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people.”
As investors processed the results, GOOG surged as much as 9% in after-hours before giving up some of its gains. GOOG closed at USD$752 on 1st February, 2016, with a market cap of $517.2 billion.
Author: Simon Herrmann
Feb 02, 2016
Simon is a financial analyst at independent research firm Wise-owl specialised in small-mid cap growth opportunities and ethical investment opportunities. Simon's aim is to disrupt the cliché approach to investment decision making as he believes that socially and environmentally responsible behaviour is a necessity to long-term wealth creation. Simon has a deep fundamental understanding of the global financial landscape and has compiled 300+ research reports, valuations and corporate appraisals. Simon is commonly featured in major media outlets and his research is published weekly in The Australian.