Alphabet
Owners:
Page Larry (Larry Page) - 26,1%
Brin Sergey Mikhailovich - 25,2%
Soros Foundation
voting shares for December 2019
Content
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In 2015, Google underwent a large-scale reorganization, as a result of which the company became known as Alphabet, and Google is the main, but not the only part of it. Separate divisions were withdrawn to areas not related to the Internet - for example, the production of self-driving cars.
Performance indicators
2023: On the list of companies with the largest R&D costs
For Amazon shows the costs of technology and content (not R&D).
ByteDance statistics date back to 2021 (according to the Wall Street Journal)
2022
Google's Cloud Business Remains Unprofitable
Google's cloud services division continues to generate losses. This is stated in the financial report published on February 2, 2023 by the parent holding Alphabet.
Alphabet's revenue in 2022 reached $282.84 billion. For comparison: a year earlier, the company showed a result of $257.64 billion. Thus, growth was demonstrated at the level of 10%. Net annual profit amounted to $59.97 billion against $76.03 billion in 2021.
The report says that in the total revenue of Alphabet in 2022, approximately $134.81 billion fell on the United States: sales growth in this region was recorded at 14%. Another $82.06 billion was brought by activities in the EMEA market (Europe, the Middle East and Africa) - plus 4% compared to 2021. In the Asia-Pacific region (APAC), revenue reached $47.02 billion, showing an increase of about 2%. The bulk of the funds continues to be generated by advertising on Google services and on the YouTube platform .
The performance indicators of the cloud division of Google Cloud in the fourth quarter of 2022 are disclosed. Operating losses of this direction amounted to $480 million against $890 million in the last quarter of 2021. Thus, the company over the year was able to reduce losses in this segment by almost half, but it has not yet been possible to bring the business to the level of profit.
Despite the losses, Google continues to invest in cloud infrastructure. In January 2023, it became known that the company will create a new cloud region in Kuwait. The emergence of this platform, as noted, will provide a significant impetus to achieve the socio-economic priorities of the state, including improving the efficiency of the government, improving health care and education, as well as diversifying the economy. There is no information about the cost and timing of the project.[1]
Increasing R&D costs
$169 billion cash on balance sheet
4th in the world in terms of capitalization
2021: Company No. 4 by Global Net Profit, in $169 Billion Cash Accounts
2020: Revenue growth to $182.53, Google's cloud business up 50%
Alphabet's revenue at the end of 2020 reached $182.53 billion against $161.86 billion. The main catalysts for the financial recovery of the American holding were Google's advertising business and Google Cloud cloud services.
According to Alphabet and Google Chief Financial Officer Ruth Porat, the strong financial performance was achieved "thanks to the search engine and YouTube against the background of a recovery in consumer and business activity."
In the direction of Google Services (this includes Google Maps, Google Search, YouTube, Chrome browser, Android OS, as well as advertising business and electronics sales under the Google brand), an annual turnover of $168.64 billion was registered against $151.83 billion in 2019.
Cloud revenue (direction of Google Cloud) in comparison with these periods rose from $8.92 billion to $13.06 billion (an increase of almost 50%). Alphabet earned $657 million on experimental projects (Other Bets is responsible for them) in 2020, which is slightly less than the one-year-old figure of $659 million.
Alphabet's net profit increased from $34.34 billion in 2019 to $40.27 billion a year later. Profit from sales of Google services on an annualized basis increased from $49 billion to $54.61 billion. The cloud division registered growing losses - they reached $5.61 billion against $4.65 billion in 2019. These cash losses are associated with the constant costs of building new and updating existing data centers.
In the direction of Other Bets, losses in 2020 amounted to $4.48 billion, while in 2019 losses here were measured at $4.82 billion.
On the day of the publication of financial statements for 2020, Alphabet shares rose to a record $2,106. This was due to the fact that the company's revenues were above market expectations, after which analysts began to raise their forecasts for the value of Alphabet securities.[2]
History
2023: $70 billion share buybacks
On April 25, 2023, Alphabet said its board had authorized a $70 billion share buyback.
2021: Creation of a software company for industrial robots
At the end of July 2021, Alphabet created a new subsidiary for the development of software for industrial robots. The new structure is called Intrinsic. The company is created on the basis of the existing Intrinsic project, which worked as part of the X Development breakthrough ideas and technologies division. Read more here.
2020
Lobbying costs
Apple said it spent $6.7 million on lobbying in 2020, meaning its spending fell from $7.4 million in 2019. Read more here.
Investing in medical tech company Verily
In mid-December 2020 Verily , it raised $700 million in investments. The medical unit Google will direct these funds to expand research, including the Baseline platform for studying coronavirus. COVID-19 More. here
The opening of the agricultural company Mineral
On October 14, 2020, X Development, owned by Alphabet, announced the opening of a new agrotech company. It is called Mineral, its activities will be focused on improving agriculture with the help of innovative technologies. Read more here.
Investing in Stripe
In mid-April 2020, it became known about the attraction of Stripe about $600 million investments. According to the results of the funding round, the company was valued at $36 billion, which makes it the most expensive startup in Silicon Valley. That's more than the cost of Palantir Technologies and Airbnb. Read more here.
Investing in Waymo
On March 2, 2020, Waymo announced that it had raised $2.25 billion in investments. This money will go to the global expansion of the developer of self-driving cars. Read more here.
Market capitalization - $1 trillion
On January 16, 2020, Alphabet's market capitalization reached $1 trillion for the first time. Thus, parent holding Google joined Apple and Microsoft, which had previously crossed the same value mark.
As evidenced by the data of the Nasdaq exchange, by the end of the main trading on January 16, Alphabet's quotation rate was $1,450.16, an increase of 0.76% compared to the previous session. At additional trading, securities rose in price by another 0.28%.
In 2019, Alphabet's share price increased by about a third, and from the beginning of 2020 to January 16 - by 9%. In the third quarter, the holding's profit fell short of Wall Street expectations, but in the weeks that followed, investors stopped paying attention to it and took heart from Alphabet's investment. This, coupled with the departure of Larry Page and Sergey Brin from the management of the holding, spurred the growth of the company's quotes.
Analysts are generally optimistic about Alphabet's stock, with 87% of experts setting a Buy or Overweight rating, according to a FactSet survey. The average analytical forecast for the value of Alphabet shares is $1,477.3.
According to analysts, Alphabet's revenue will grow by about 20% at the end of 2019 and exceed $160 billion. This is roughly in line with its growth rate in 2010, although sales were then five times smaller.
 | It is unlikely that 10 years ago someone assumed that even now it will grow by 20%, - RBC Capital Markets analyst Mark Mahaney told the Financial Times. |  |
According to him, Google made an extremely successful deal by acquiring YouTube. At the same time, it still has huge potential for growth, because it occupies only 10-15% of the global advertising market, the expert is sure.
Baird analyst Colin Sebastian considers the e-commerce business that Alphabet is developing to be undervalued.
| | Google has broken away from rivals in the e-commerce market. Having occupied about a third of such trading, the Google Shopping service should become an even more important driver of Alphabet's growth as part of an alternative to other marketplaces, he said.[3] | |
2019
$15 billion from YouTube and $9 billion from the clouds
In 2019, Alphabet recorded $161.86 billion in revenue, up 18% from a year earlier. Excluding currency fluctuations, sales of the holding, which includes Google, increased by 20%.
Almost the entire turnover of Alphabet still falls on Google - in 2019 we are talking about the amount of $160.74 billion. In 2018, the indicator was measured at $136.36 billion. Advertising revenue attributable to Google reached $134.81 billion in 2019, an increase from $116.46 billion a year earlier.
Alphabet revealed YouTube's annual revenue for the first time. In 2019, it amounted to $15.15 billion against $11.16 billion. YouTube has more than 20 million paid subscribers (YouTube Premium and YouTube Music), another 2 million users are subscribed to the YouTube TV service, Sundar Pichai said at a conference on the publication of financial statements. The revenue of individual YouTube services was not disclosed, this indicator in the company's statements is included in "revenue from other sources." According to Reuters, analysts expected a higher revenue from YouTube for the year - within $25 billion.
On cloud services (Google Cloud direction), the holding earned $5.83 billion and $8.92 billion in 2018 and 2019, respectively. The company intends to triple the number of employees working in the cloud division who serve business users.
The direction of experimental projects Other Bets in 2019 received revenue in the amount of $659 million. In 2018, it amounted to $585 million.
Roughly 84% of Google's revenue comes from the advertising business. The rest is formed from sales of applications, gadgets and cloud services, as well as from some departments engaged, for example, in the provision of Internet access services.
Alphabet ended 2019 with a net profit of $34.34 billion, up from a year earlier, when profits equaled $30.74 billion.[4]
Among the 20 most profitable companies in the world
Larry Page and Sergey Brin quit their posts but will be involved in Google life
On December 3, 2019, Larry Page and Sergey Brin announced their resignation from the positions of CEO and President of Alphabet, respectively. At the same time, the founders of Google will remain on the board of directors and shareholders of the holding, which they previously headed. Read more here.
The decision of the Toronto authorities to reduce the area of the "smart city" Alphabet by 15 times
As it became known on November 7, 2019, municipal officials responsible for the development of coastal areas Toronto decided to significantly reduce the area of "smart city" Sidewalk Labs. Initially, the "daughter" American IT of the giant Alphabet planned to master about 77 hectares on the shores of Lake Ontario, but received permission only for 5 hectares, writes. The New York Times
According to the publication, the reason for the adjustment of the project was the discontent of local residents and experts concerned about the company's plans to collect and use personal data. Initially, Sidewalk Labs planned to accumulate all data in a fully autonomous data center, which, however, did not suit officials who feared a repetition of the scandal with Facebook and Cambridge Analytica. As a result, the developer decided to abandon the original model of working with Big Data, declaring his readiness to cooperate with the authorities.
Such a compromise, however, did not appeal to everyone.
| | The best way out of this situation for Waterfront Toronto (a government agency dedicated to the development of coastal areas - ed.) Will end any relationship with Sidewalk as soon as possible, "said Julie Beddows, a local resident and member of the BlockSidewalk group. | |
Sidewalk Labs itself has already announced its intention to continue the project regardless of scale. To do this, however, he has to go through another round of approvals and public hearings.[5]
2018: Revenue - $136.82 billion; profit - $30.74 billion
In 2018, Alphabet's revenue amounted to $136.82 billion against $110.86 billion a year earlier (an increase of 23%). Almost all sales - $136.22 billion - fell on Google. In 2017, Google's revenues were measured at $110.86 billion. The bulk of the turnover comes from advertising receipts.
Alphabet's remaining revenue is generated by its Other Bets segment, which is developing new projects such as contact lenses with a blood sugar detection function, balloons to provide internet access and self-driving cars. In 2018, Other Bets revenue amounted to $595 million, an increase from $477 million in 2017.
The total number of paid transitions on advertisements that Alphabet shows users increased by 22% on an annualized basis. At the same time, the cost of each click decreased by 9%.
Alphabet's net profit at the end of 2018 reached $30.74 billion against $12.66 billion a year ago.
Google's annual profit increased from $32.29 billion to $36.52 billion, and in the Other Bets segment there were equal $3.36 billion losses. In 2017, Other Bets' losses amounted to $2.74 billion.
Alphabet is actively investing in business development, so the holding's capital expenditures in 2018 almost doubled to $25.14 billion.
In 2018, about 46% of Alphabet's revenue came from the American market, up from 47% a year and two years earlier. The Asia-Pacific revenue share was unchanged at 15%. In EMEA countries (Europe, Middle East, Africa), the company earned 33% of revenue, namely, $44.57 billion. In 2017, this figure was measured at $36.05 billion. Thus, Alphabet's sales in EMEA rose 24%.
On the day the results were published - February 4, 2019 - Alphabet quotes fell by about 3%, despite the fact that the company's revenues exceeded market expectations. Analysts attribute this decline to growing investments in the cloud business, YouTube video hosting and other projects on which the holding has high hopes for growth. Cloud services costs will pay off over several years, according to Wedbush Securities analyst Daniel Ives.
From the beginning of 2019 to February 4, Alphabet shares rose by 9%.[6]
2017: Construction of a high-tech district
In October 2017, it became known about Alphabet's plans to build a high-tech district in Canada, in which all areas of people's lives will be controlled by automated systems.
The project will be implemented by Sidewalk Labs, part of Alphabet, which will invest $1 billion in it. The first portion of investments aimed at planning and testing pilot developments amounted to $50 million.
It is about creating a "smart" town on the shores of Lake Ontario in Toronto. Sidewalk Labs won an application to develop 12 acres (about 5 hectares) of the area with the prospect of increasing the development area to 800 acres (323 hectares). At first, the area of the futuristic zone will be 8 square meters. km
Sidewalk Labs unveiled a 196-page document containing the company's wide-ranging ideas for the future of the new district, including high-speed ferries, seasonally adaptable parks and robotic garbage trucks. For passenger transportation, it is planned to use self-driving taxis and buses instead of personal transport, and bicycle paths will be heated.
There will be many sensors and cameras everywhere to collect information about pedestrian and vehicle flows, pollution and the state of infrastructure. Cargo will be able to deliver drones, underground routes will be laid for them.
The Financial Times notes that the main problem of the "smart" area will be the preservation of the confidentiality of the data of local residents, since technology will control all areas of people's lives - from garbage collection to noise levels in homes.[7]
The creation of the district will require many changes to existing laws on, and construction transport energy supply.
| | This is a test platform for new technologies that will help us build cleaner, smart, greener cities, "said Canadian Prime Minister Justin Trudeau, who approved Alphabet's initiative. | |
See also Smart cities
2015: Google shares rise 20% after Alphabet launch announcement
Since the beginning of October, when Alphabet was announced, its shares have grown by 20% - whether this is not proof that the founders of Google did everything right.
Alphabet earned nearly $75 billion in the year and had an operating profit of $23 billion. Despite the fact that Google is a huge company with tens of thousands of employees, it is growing at a pace that many startups can envy - in the fourth quarter, Google's revenue rose 18%[8].
The facts are that Google is still the main search engine in the world, YouTube is the main video hosting, Chrome is one of the main browsers, Android is the most popular mobile operating system with a huge gap from iOS and Windows. Google is able to monetize traffic through advertising. But not only at its expense: two billion dollars of the company brings "other revenues," in particular, subscription fees for using cloud services and the Google Play app store.
The news of the change in the leader in capitalization should not be overestimated: the shares of both Google and Apple remain one of the most attractive securities on the stock exchange. A symbol is important: from now on, the most expensive company in the world produces not innovative and elite products, but something that almost half of the world's population uses at least once a day.
Notes
- ↑ Alphabet Announces Fourth Quarter and Fiscal Year 2022 Results
- ↑ Alphabet Q4 2020 Earnings Call
- ↑ Google’s parent company, hits trillion-dollar market cap for first time
- ↑ Alphabet Announces Fourth Quarter and Fiscal Year 2019 Results
- ↑ Toronto authorities have reduced Google's smart city by 15 times
- ↑ Alphabet Announces Fourth Quarter and Fiscal Year 2018 Results
- ↑ Alphabet to build futuristic city in Toronto
- ↑ Android defeated Three reasons why Apple is no longer the most expensive company in the world
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