Alphabet Inc(NASDAQ: GOOGL) stock fell over 2.1% in the after-hours session on Feb 1st, 2018 (Source: Google finance) post their fourth quarter of 2017 performance. The group’s Profit lost 35% to $12.6 billion for FY17 hurt by tax bill and a separate charge of $2.7 billion European Union antitrust fine, which is under appeal. Moreover, rising expenses have also been a concern with the Operating expenses rising 19% yoy to $10.4 billion, for the quarter hurt by rise in marketing spend, due to holiday season.
Among cost of revenues, major component was traffic acquisition costs, with mobile search incurring more TAC as compared to the desktop business. The group forecasts sites TAC to rise as a percentage of sites revenue, given the ongoing strength in mobile search. As a result, they forecast the pace of year-over-year growth in sites TAC as a percentage of sites revenue to slow post the first quarter of 2018.
On the other hand, for 2017, the 2017 revenues rose 23% yoy to $110.9 billion, while fourth quarter revenues surged 24% yoy to $32.3 billion. The group’s sites revenue continues to be strong as their innovation efforts coupled with secular growth with mobile search paying off. Major growth for other revenues were from hardware, cloud and Play.
As per the geographic segment performance, the U.S. revenues enhanced 21% yoy to $15.4 billion, while EMEA revenues enhanced 24% yoy to $10.3 billion. APAC revenues enhanced 30% yoy to $4.7 billion, while other Americas revenues surged 31% yoy to $1.9 billion.
With regards to the segment performance, the Google sites revenues surged 24% yoy to $22.2 billion during the quarter, driven by mobile search, supported by desktop search and strong performance from YouTube. The Network revenues rose 13% yoy to $5 billion, boosted by programmatic and AdMob. Other revenues for Google rose 38% yoy to $4.7 billion, driven by hardware, cloud and Play.
Google Cloud made $1 billion per quarter business which has Google Cloud Platform and G Suite business. The group has over a $1 million worth of deals across their cloud products which more than tripled from 2016 to 2017. The strength of their products and the value of working with Google is increasingly clear to partners and customers.