Google's parent company Alphabet reports 11% rise in Q4 ad revenue

Google’s parent company Alphabet reported a rise of 11% in its advertising revenue to $65.52 billion in the fourth quarter, compared with $59.04 billion a year ago.

Google's Q4 advertising revenue grew by $6.48 billion compared to the previous year, and YouTube ad revenue reached $9.2 billion, surpassing the $8 billion recorded in 2022.

Search revenue saw a robust growth of 12.7%, coupled with a substantial increase in revenue for YouTube ads, which surged by 15.5%.

Alphabet achieved its highest-ever sales in the fourth quarter, totalling $86.3 billion versus $85.33 billion expected by LSEG.

Sundar Pichai, CEO, said, “We are pleased with the ongoing strength in Search and the growing contribution from YouTube and Cloud. Each of these is already benefiting from our AI investments and innovation. As we enter the Gemini era, the best is yet to come.”

Ruth Porat, President and Chief Investment Officer; CFO said, “We ended 2023 with very strong fourth quarter financial results, with Q4 consolidated revenues of $86 billion, up 13% year over year. We remain committed to our work to durably re-engineer our cost base as we invest to support our growth opportunities.”

Alphabet faces intense competition for advertising budgets, with other online platforms like Facebook, Instagram, TikTok, and Amazon.com vying for a share amid mixed economic signals.

The company announced that its expenditure on items like servers to support artificial intelligence would experience a significant increase this year.

Alphabet's capital expenditure surged by 45%, reaching $11 billion, marking the highest in several years. During a conference call, CFO Porat informed analysts that capital expenditures for the current year would significantly exceed those of 2023.

As a result of workforce reductions in the previous year, the company incurred severance and associated charges totalling $2.1 billion for the year 2023.

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