Alphabet’s Profit Increased 89% For the Year 2021

Google parent Alphabet Inc reported record quarterly sales that topped expectations, as its internet advertising business surged on consumers using Google search as they shopped online and advertisers upping their marketing budgets. Alphabet’s shares jumped more than 8% in after-hours trading, also rising on the company’s announcement that it would undertake a 20-to-one stock split. For the 2021 year, Alphabet’s profit increased 89% to $76 billion.

Alphabet’s sales jumped 32% to $75.3 billion in the fourth quarter, for a third straight quarterly sales record and topping the average estimate of $72 billion among financial analysts tracked by Refinitiv.

Alphabet’s Profit Increased 89% For the Year 2021

Analysts said Google, which generates more revenue from internet ads than any other company, is proving that its growth is unstoppable for the foreseeable future.

See Also: Alphabet’s Project Taara Used Lasers to Transmit over 700TB of Data

Shares of Alphabet rose 8.6% in after-hours trading, to $2,990.10, erasing their losses for the year-to-date. Shares of competitors in online ads including Facebook owner Meta Platforms Inc, Twitter Inc, Trade Desk Inc and Snap Inc all rose as well.

For the 2021 full year, Alphabet’s sales rose 41% to a record $258 billion. Sales had grown just 13% in 2020, the slowest rate in over a decade, after advertisers slashed spending in the first few weeks of the pandemic.

Across both 2021 and 2020, Google’s advertising business, including YouTube, accounted for 81% of Alphabet’s revenues.

Companies including Inc and ByteDance’s TikTok have been taking small pieces of Google’s share of the global advertising market. But market forecasters do not expect major slippage in Google’s leading position. Google’s secondary businesses, including Cloud, also have been lifting overall sales.

Also Check: Alphabet’s Google Threatens to Fire Unvaccinated Employees

Google Cloud, which serves clients such as online shopping software maker Shopify Inc, increased quarterly revenue by 45% to $5.5 billion, above estimates of $5.4 billion.

The division’s operating loss narrowed by 45% to $3.1 billion in 2021.

Alphabet Chief Executive Sundar Pichai told analysts that Cloud is exploring how to support clients that want to use blockchain, one of several emerging technologies that proponents view as crucial to kickstarting a new era of online innovations.

Alphabet’s quarterly profit was $20.6 billion, or $30.69 per share, beating expectations of $27.56 per share and marking a fourth straight quarter of record profit. The profit benefited from unrealized gains from Alphabet’s investments in startups, and the company also got a $2 billion boost last year from extending the useful life of its servers and networking gear.

Alphabet’s total costs in 2021 increased 27% to $178.9 billion as the company began to resume its pre-pandemic pace of hiring and construction. The company also noted increased legal fees, costs from a one-time bonus of $1,600 to all employees, and a rise in charitable contributions as it matched increased giving by employees.

Source: Tribune

Onsa Mustafa

Onsa is a Software Engineer and a tech blogger who focuses on providing the latest information regarding the innovations happening in the IT world. She likes reading, photography, travelling and exploring nature.
Back to top button