Google Cloud revenue jumps 45 percent

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Google Cloud revenue jumps 45 percent

Google Cloud’s fourth-quarter revenue rose 45 percent to US$5.5 billion from the same period last year – with Google Cloud Platform (GCP) revenue outpacing that growth — as parent company Alphabet’s overall performance easily beat Wall Street expectations.

Google Cloud, the industry’s No. 3 cloud provider had a “big year,” Alphabet and Google CEO Sundar Pichai said during an earnings call today with financial analysts.

Google Cloud’s revenue comes primarily from fees received for GCP services and Google Workspace (formerly known as G Suite) collaboration tools. GCP recorded more than 80 percent growth in total deal volume in 2021 compared to the prior year and more than 65 percent growth in the number of deals exceeding US$1 billion, Pichai said.

Alphabet’s backlog of business, meanwhile, increased more than 70 percent in the fourth quarter to US$51 billion compared to the same period in 2020, most of which is attributed to Google Cloud.

Alphabet remains focused on the “longer-term path to profitability for Google Cloud,” according to Ruth Porat, chief financial officer of Alphabet and Google. Google Cloud’s fourth-quarter operating loss dropped to US$890 million, from US$1.24 billion in last year’s fourth quarter. (Google Cloud had reported a US$644 million loss in the third quarter that ended Sept. 30, 2021.)

“We’re very pleased with the ongoing progress in the business, and that’s reflected in the revenue growth, our backlog, the breadth of customer wins, the industry verticals,” Porat said. “Our view is that we’re in an extraordinary time to help customers digitally transform their businesses, and the key thing is we believe it remains very early innings. So as a result, our focus remains on revenue growth and investing as needed as we’re looking over the long term. We’re continuing to invest aggressively, and it’s in our go-to-market capabilities, it’s our products, it’s our infrastructure.”

Google Cloud now has an annualized revenue run rate of US$22.16 billion, up from US$19.96 billion based on its third-quarter results.

Its growth came from businesses including grocery chain Albertsons and luxury goods retailer LVMH, digital-native companies including Spotify and public sector agencies including the Commonwealth of Massachusetts, the Defense Innovation Unit and the U.S. Department of Agriculture, according to Pichai.

“Our salesforce, which we have more than tripled since 2019, delivered strong results across geographies, products and industries, and we continue to invest,” he said. “Our partner ecosystem is helping accelerate our growth.”

The number of customers spending more than US$1 million through the online Google Cloud Marketplace, which includes software from the cloud provider’s independent software vendor partners, increased by 6x in 2021 compared to 2020.

“Customer spend through channel partners on GCP more than doubled, and the number of active certifications within our top global systems integrators more than doubled as well,” Pichai said.

Google Cloud had 2,000-plus new cloud product and feature releases last year.

“Customers come to Google Cloud because of our expertise in bringing enterprises and consumer ecosystems closer together,” Pichai said, citing Ottawa-based ecommerce company Shopify as an example.

“From Black Friday through Cyber Monday, Shopify reported US$6.3 billion in global sales by 47 million customers — all safely transacted on Google Cloud,” Pichai said, referring to two of the biggest holiday shopping days of the year.

Alphabet’s overall results

Alphabet’s overall fourth-quarter revenue climbed 32 percent to US$75.33 billion from last year’s same period based on broad-based strength in advertiser spending, strong consumer online activity and the revenue growth from Google Cloud. Analysts had expected US$59.32 billion in revenue and US$26.69 in earnings per share, according to the consensus poll by Zack’s Investment Research. Alphabet’s net income came in at US$20.64 billion or US$30.69 in earnings per share.

Alphabet also announced a 20-for-one stock split — subject to shareholder approval — in the form of a one-time special stock dividend on each share of its Class A, Class B and Class C stock. Each shareholder as of the close of business on July 1 would receive on July 15 a dividend of 19 additional shares of the same class of stock for every share that they own.

Alphabet’s stock, which closed at US$2,752.88 per share in regular trading, gaining 1.73 percent, jumped in after-hours trading following the earnings announcement. It was up 8.98 percent to US$3,000 per share as of 7:28 p.m. ET.

This article originally appeared at

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