Alphabet Slips Following Q4 2024 Financials, Plans To Spend $75B In Capex
Alphabet (NASDAQ: GOOGL) reported its Q4 and full-year 2024 financials, posting a quarterly revenue of $96.5 billion, up from $86.3 billion a year earlier, reflecting 12% year-over-year growth. This came in slightly below the $96.7 billion analysts had anticipated.
Google Services revenues increased from $76.3 billion to $84.1 billion, up 10% compared to the same quarter in 2023, driven by higher ad sales and strong demand for subscription products. YouTube ads revenue also rose from $9.2 billion to $10.5 billion.
Google Cloud’s performance showed top-line growth from $9.2 billion to $12.0 billion, representing a 30% climb, but still missed consensus estimates. However, it contributed to a large jump in operating income within Google Cloud, which rose from $864 million to $2.1 billion.
Alphabet’s experimental ventures referred in the financials as Other Bets, in contrast, saw its revenue slip from $657 million to $400 million, and its operating loss increased from $863 million to $1.17 billion.
Overall operating margin for the quarter improved from 27% to 32%. Net income rose from $20.7 billion to $26.5 billion, a 28% increase. Earnings per share grew from $1.64 to $2.15 year over year and beat Wall Street’s projection of $2.13.
Full-year financials mirrored these quarterly trends with annul revenue reaching $350.0 billion, up 14% from the prior year’s $307.4 billion.
Operating income advanced from $84.3 billion to $112.4 billion, and net income grew from $73.8 billion to $100.1 billion, reflecting a jump in diluted earnings per share from $5.80 to $8.04.
A closer look at Alphabet’s balance sheet shows total assets climbing from $402.4 billion to $450.3 billion over the past year, supported by heavier capital investments that brought property and equipment from $134.3 billion to $171.0 billion. Current assets declined from $171.5 billion to $163.7 billion, in large part due to a reduction in marketable securities, while current liabilities rose from $81.8 billion to $89.1 billion.
More AI?
Despite a series of positive year-over-year comparisons, Alphabet’s share price dropped more than 7% in after-hours trading following the quarterly release.
The company shared its plans to allocate $75 billion to capital expenditures in 2025, which far exceeds the market’s earlier expectations of $57 billion and signals a sizable commitment to expanding data centers, AI infrastructure, and other technologies.
The ripple effects of such spending plans have already reached hardware providers and chipmakers like NVIDIA (NASDAQ: NVDA), which saw its shares jump nearly 2% following the capex announcement.
Information for this briefing was found via the sources and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
