Google's parent company Alphabet posts quarterly revenues of $21bn, overtakes Apple as world's most valuable company
Google’s parent company Alphabet reported revenues of $21.33bn for the last three months of 2015, representing an 18 per cent year-on-year rise, in a performance that is set to see it overtake Apple as the world’s most valuable company.
Alphabet’s stock price surged in the immediate aftermath of the quarterly results release, with the Google-parent vastly outperforming earlier analyst expectations. Net profits rose to $4.9bn in the fourth quarter compared to $4.7bn 12 months earlier, with Ruth Porat, CFO of Alphabet, claiming this was based on the back of the strong performance of its mobile and YouTube business.
“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,” she said in a statement.
“We're excited about the opportunities we have across Google and Other Bets to use technology to improve the lives of billions of people.”
Meanwhile, total revenues for 2015 numbered $74.5bn, up from $65.7bn 12 months earlier. The “other bets” business referred to by Porat is a reference to the ventures away from the online advertising giant’s core business, for instance its self-driving cars projects, or “moonshot businesses”.
These ventures are still comparatively nascent, with the latter unit operating at a loss of $3,567m, on total revenues of $448m, showing how its core advertising revenue is still the life-blood of the newly formed entity.
However, the performance surpassed analysts’ earlier expectations, with the company’s share price spiking in the immediate aftermath of the posting, overtaking Apple as the world’s most valuable company, with the Mountainview-based company valued as high as $553bn, according to reports.
Alphabet is set to further reveal details of its performance over the period in an earnings call hosted later today (1 February).
Commenting on the initial earnings release Stephanie Carr, VP EMEA at Marin Software, said: “In the fight for advertisers’ wallets, Google needs to fend off the mounting challenge from social platforms, with mobile a key battleground. And the signs so far are that it’s managing to hold its own against the likes of Facebook and Twitter – the latest results are positive, with the growth in ad revenue stemming from mobile.
“The new structure reveals, as we already knew, that the core business model Google started over 15 years ago remains vital to the company’s success. Search marketing is still an important channel for marketers and separates Google from its social rivals."