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Alphabet Announces Fourth Quarter and Fiscal Year 2018 Results

154 points by throwaway5752 8y ago

chollida1 8y ago
Pre: - will Porat be cutting "other bets", rumors is that other bets is in line for a big budget cuts - Options implied vol is showing enough movement baked in that GOOG could become largest company by Market Cap if the street likes their numbers, and GOOG doesn't disappoint often - Like Facebook the public and wallstreet have weighed in and they love money more than privacy. - analysts are not in anyway mixed about Google's prospects - 41 buy recommendations vs 2 hold and 0 sell Add Revenue: - 4Q paid clicks on Google's own sites is up 66%, seems high enough that it's not organic but more than likely increased advertising space on sites, forced youtube videos, etc - Cost per click on Google's own sites is down 29% Numbers: - 4Q profit of $8.2B est $8.7B - 4Q EPS $12.77 - 4Q expenses $31.2B up from $24.7B yoy. - 6.85B on capex vs $3.8B yoy - 4Q operating margin 21% down from 24% yoy. - 4Q other bets lost $1.33 billion, don't hear much about these bets anymore but that is an outsized loss in this category. -Again they mention Verily and Waymo in passing but no details worth mentioning. - 4Q Add Revenue $32B - 4Q own site revenues $27B Misc: - shares are down a bit, lots of volume, nothing out of ordinary, guessing its mostly covering and profit taking. - Too bad for almost all factor models that really on trade on tech Momentum - The company added nearly 20,000 employees over the year. * WOW, double check this, that's a large head count addition. - can't find any Cloud break outs, I guess MSFT and AMZN are really beating them, given how much of a growth engine it is for the 2 leaders I can't see why GOOG would hid it if they were able to compete. - No youtube breakout of revenues, Again not a bullish sign for that division, stil nothing on youtube on the call. - EDIT on the earnings call they did talk briefly about Youtube, no real new numbers though, just their assurance that youtube is crushing it - Porat is doing gymnastics to talk about youtube but not actually say anything about youtube. Are youtbue numbers really that bad???? - Google was the top lobby spender of 2018, not in tech but for all companies. Silicon Valley is now arguably bigger force than Wall Street on US politics. - margins are down and spending is up, not sure if its GOOG that wants to spend to grow or its competitors that are forcing it to compete. Either way, this competition is great for tech salaries - Employees totaled 98,771 in the quarter vs 80,110 a year ago, WOW
- theDoug 8y ago
  Employee counts via Form 10-K releases (as of EoY each year): 2013: 47,756 (too lazy to look earlier) 2014: 53,600 (+12.2% YoY) 2015: 61,814 (+15.3% YoY) 2016: 72,053 (+16.5% YoY) 2017: 80,110 (+11.1% YoY) 2018: 98,771 (+23.2% YoY) Source: https://abc.xyz/investor/ https://abc.xyz/investor/ This does not include contractor, temp, and vendors
  - adtac 8y ago
    I imagine most of the engineering addition is in Google Cloud? Given the fierce competition at the top with AWS and Azure. Just a guess though.
  - koolba 8y ago
    Any idea of the breakdown of engineers vs sales?
    - deleted 8y ago
      [deleted]
    - vanadium 8y ago
      Asking the real questions here, I'm seriously interested in knowing the staff breakdown by role.
      - theDoug 8y ago
        The opening statements of the quarterly public analyst calls give a lot of good direction. I don't think anyone would be foolish enough to blab an actual breakdown for this, Alphabet- or Cloud-wide. https://www.youtube.com/watch?v=31_KHdse_0Y https://www.youtube.com/watch?v=31_KHdse_0Y
- stingraycharles 8y ago
  What happened with the increased headcount? Which areas is this in? It would be great news if this were on sales / support (in cloud?) since they’re severely underrepresented in these areas and it seems like low hanging fruit to invest here. Would this increase in headcount be an explanation for increased expenses? If not, what would explain the dramatic increase in expenses?
techntoke 8y ago
I had been a Google fan for a long time but they lost my business recently because despite paying over $30/mo for G Suite and a YouTube Premium family plan with Google Play Music, they apparently can't help tell me why they blocked my daughter from live streaming to YouTube. The video in question was her playing with legos, and when I disputed it asking why they blocked her... they literally just responded saying the block was valid without ever giving a reason. Like, what the heck Google you act like robots. Anyway, just cancelled my Premium services because they could never give a straight answer.
- ceejayoz 8y ago
  If she's under 13, it's likely that's the reason. Even if you're paying for G Suite, you can't have someone under 13. There is a special, limited type of Google account for sub-13 kids: https://support.google.com/families/answer/7103338 https://support.google.com/families/answer/7103338
  - bleriot 8y ago
    Maybe Google should have put that in the explanation instead of not giving a reason.
    - ceejayoz 8y ago
      I wouldn't be shocked if the lawyers say COPPA means they can't, as they're not supposed to have any info about the child, including a) that they exist and b) that they're under 13.
  - rstupek 8y ago
    Then you'd think it would be easy for Google to have said that instead of giving him no reason beyond "yep it's legit"
    - dekhn 8y ago
      Google typically won't give reasons because people use that information to get around blocks.
gzu 8y ago
The TLDR: First time in years EPS dropped Q/Q. Big increases in spending.
curiousDog 8y ago
The cloud bet better pay off or they’re in big trouble. Especially since they’re the number 3 player and not the market dominant player like Ads. Will be interesting to see how they play out
- iamgopal 8y ago
  By 2025, they will dominate. I have used it, it is better, and slowly but surely people are moving to Google cloud.
  - oblio 8y ago
    Yes, the myth of tech superiority. Just like MS DOS, Windows, Android or the web stack won by being superior. AWS is bigger and growing at least at the same rate. I wouldn't bet on Google becoming #1.
    - deleted 8y ago
      [deleted]
    - sanowski 8y ago
      where lies a myth? It's customer needs vs. tech that wins.
      - oblio 8y ago
        I agree, I personally don't think it's a valid myth. As you said, the customer overall knows what he wants, and he doesn't want technical (or ideological, in the case of Free Software) purity. I was just pointing out that because techies consider something superior (ergo the myth), it doesn't necessarily "win". Plus in this case I think it's really, really hard to argue that GCP is superior to AWS.
- joncrane 8y ago
  Right now Google is niche for Big Data and ML type of stuff. Their ecosystem has the lead as far as the best tool for the job out of the big three. AWS is still blowing them out of the water in the "Enterprise" market, which they are really struggling to break into, but they're pushing hard.
TaylorSwift 8y ago
I hate office google products. My work place uses it. Google Driver File Stream is slower than share drive, along with it always "streaming" in the background. VPNing makes it even worse. Can't use hotkeys in Google Sheets, and there are limited functions to it as well. I hate clicking when using Excel all day. Chrome is slow and bloated. Sites sometimes don't render properly. GMail is slow, and its UI isn't making things better. Notifications do not always appear, and missing a scheduled meeting/call can be embarrassing or make you look irresponsible -- and looking at long email threads can get confusing. GChat/Hangouts or whatever it's called runs within the browser, which I entirely dislike because it takes up a fraction of what you're looking it -- so I just end up using the hangouts software. The whole GSuite thing is only good for collaborative purposes. But it slows down the PC so GODDAMN much that it brings inefficiencies and headache. I really wished the employer didn't go Google and chose an alternative.

154 points by throwaway5752 8y ago

Pre: - will Porat be cutting "other bets", rumors is that other bets is in line for a big budget cuts - Options implied vol is showing enough movement baked in that GOOG could become largest company by Market Cap if the street likes their numbers, and GOOG doesn't disappoint often - Like Facebook the public and wallstreet have weighed in and they love money more than privacy. - analysts are not in anyway mixed about Google's prospects - 41 buy recommendations vs 2 hold and 0 sell Add Revenue: - 4Q paid clicks on Google's own sites is up 66%, seems high enough that it's not organic but more than likely increased advertising space on sites, forced youtube videos, etc - Cost per click on Google's own sites is down 29% Numbers: - 4Q profit of $8.2B est $8.7B - 4Q EPS $12.77 - 4Q expenses $31.2B up from $24.7B yoy. - 6.85B on capex vs $3.8B yoy - 4Q operating margin 21% down from 24% yoy. - 4Q other bets lost $1.33 billion, don't hear much about these bets anymore but that is an outsized loss in this category. -Again they mention Verily and Waymo in passing but no details worth mentioning. - 4Q Add Revenue $32B - 4Q own site revenues $27B Misc: - shares are down a bit, lots of volume, nothing out of ordinary, guessing its mostly covering and profit taking. - Too bad for almost all factor models that really on trade on tech Momentum - The company added nearly 20,000 employees over the year. * WOW, double check this, that's a large head count addition. - can't find any Cloud break outs, I guess MSFT and AMZN are really beating them, given how much of a growth engine it is for the 2 leaders I can't see why GOOG would hid it if they were able to compete. - No youtube breakout of revenues, Again not a bullish sign for that division, stil nothing on youtube on the call. - EDIT on the earnings call they did talk briefly about Youtube, no real new numbers though, just their assurance that youtube is crushing it - Porat is doing gymnastics to talk about youtube but not actually say anything about youtube. Are youtbue numbers really that bad???? - Google was the top lobby spender of 2018, not in tech but for all companies. Silicon Valley is now arguably bigger force than Wall Street on US politics. - margins are down and spending is up, not sure if its GOOG that wants to spend to grow or its competitors that are forcing it to compete. Either way, this competition is great for tech salaries - Employees totaled 98,771 in the quarter vs 80,110 a year ago, WOW

theDoug 8y ago
Employee counts via Form 10-K releases (as of EoY each year): 2013: 47,756 (too lazy to look earlier) 2014: 53,600 (+12.2% YoY) 2015: 61,814 (+15.3% YoY) 2016: 72,053 (+16.5% YoY) 2017: 80,110 (+11.1% YoY) 2018: 98,771 (+23.2% YoY) Source: https://abc.xyz/investor/ https://abc.xyz/investor/ This does not include contractor, temp, and vendors
- adtac 8y ago
  I imagine most of the engineering addition is in Google Cloud? Given the fierce competition at the top with AWS and Azure. Just a guess though.
- koolba 8y ago
  Any idea of the breakdown of engineers vs sales?
  - deleted 8y ago
    [deleted]
  - vanadium 8y ago
    Asking the real questions here, I'm seriously interested in knowing the staff breakdown by role.
    - theDoug 8y ago
      The opening statements of the quarterly public analyst calls give a lot of good direction. I don't think anyone would be foolish enough to blab an actual breakdown for this, Alphabet- or Cloud-wide. https://www.youtube.com/watch?v=31_KHdse_0Y https://www.youtube.com/watch?v=31_KHdse_0Y
stingraycharles 8y ago
What happened with the increased headcount? Which areas is this in? It would be great news if this were on sales / support (in cloud?) since they’re severely underrepresented in these areas and it seems like low hanging fruit to invest here. Would this increase in headcount be an explanation for increased expenses? If not, what would explain the dramatic increase in expenses?

techntoke 8y ago

I had been a Google fan for a long time but they lost my business recently because despite paying over $30/mo for G Suite and a YouTube Premium family plan with Google Play Music, they apparently can't help tell me why they blocked my daughter from live streaming to YouTube. The video in question was her playing with legos, and when I disputed it asking why they blocked her... they literally just responded saying the block was valid without ever giving a reason. Like, what the heck Google you act like robots. Anyway, just cancelled my Premium services because they could never give a straight answer.

ceejayoz 8y ago
If she's under 13, it's likely that's the reason. Even if you're paying for G Suite, you can't have someone under 13. There is a special, limited type of Google account for sub-13 kids: https://support.google.com/families/answer/7103338 https://support.google.com/families/answer/7103338
- bleriot 8y ago
  Maybe Google should have put that in the explanation instead of not giving a reason.
  - ceejayoz 8y ago
    I wouldn't be shocked if the lawyers say COPPA means they can't, as they're not supposed to have any info about the child, including a) that they exist and b) that they're under 13.
- rstupek 8y ago
  Then you'd think it would be easy for Google to have said that instead of giving him no reason beyond "yep it's legit"
  - dekhn 8y ago
    Google typically won't give reasons because people use that information to get around blocks.

gzu 8y ago

The TLDR: First time in years EPS dropped Q/Q. Big increases in spending.

curiousDog 8y ago

The cloud bet better pay off or they’re in big trouble. Especially since they’re the number 3 player and not the market dominant player like Ads. Will be interesting to see how they play out

iamgopal 8y ago
By 2025, they will dominate. I have used it, it is better, and slowly but surely people are moving to Google cloud.
- oblio 8y ago
  Yes, the myth of tech superiority. Just like MS DOS, Windows, Android or the web stack won by being superior. AWS is bigger and growing at least at the same rate. I wouldn't bet on Google becoming #1.
  - deleted 8y ago
    [deleted]
  - sanowski 8y ago
    where lies a myth? It's customer needs vs. tech that wins.
    - oblio 8y ago
      I agree, I personally don't think it's a valid myth. As you said, the customer overall knows what he wants, and he doesn't want technical (or ideological, in the case of Free Software) purity. I was just pointing out that because techies consider something superior (ergo the myth), it doesn't necessarily "win". Plus in this case I think it's really, really hard to argue that GCP is superior to AWS.
joncrane 8y ago
Right now Google is niche for Big Data and ML type of stuff. Their ecosystem has the lead as far as the best tool for the job out of the big three. AWS is still blowing them out of the water in the "Enterprise" market, which they are really struggling to break into, but they're pushing hard.

TaylorSwift 8y ago

I hate office google products. My work place uses it. Google Driver File Stream is slower than share drive, along with it always "streaming" in the background. VPNing makes it even worse. Can't use hotkeys in Google Sheets, and there are limited functions to it as well. I hate clicking when using Excel all day. Chrome is slow and bloated. Sites sometimes don't render properly. GMail is slow, and its UI isn't making things better. Notifications do not always appear, and missing a scheduled meeting/call can be embarrassing or make you look irresponsible -- and looking at long email threads can get confusing. GChat/Hangouts or whatever it's called runs within the browser, which I entirely dislike because it takes up a fraction of what you're looking it -- so I just end up using the hangouts software. The whole GSuite thing is only good for collaborative purposes. But it slows down the PC so GODDAMN much that it brings inefficiencies and headache. I really wished the employer didn't go Google and chose an alternative.