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3 Takeaways From Alphabet's Earnings

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Alphabet is our Real Money stock of the day after the company posted earnings after the bell Monday night.

The company was down around 4% directly after earnings and into Tuesday morning after posting revenue that missed expectations.

The company reported revenue of $46.08 billion, falling short of expectations of $46.9 billion.

So, following the initial earnings and the conference call, let’s take a look at three of the biggest takeaways from the report of the Final FAANG.

And, just a note, this was Sundar Pichai’s first quarter as CEO of both Alphabet and Google.

Alphabet Broke Out Its Revenue for Both YouTube and Cloud.

YouTube ad revenue came in at $4.72 billion for Q4.

Revenue was up 36% annually in 2019 to $15.15 billion, which is actually a little below what some analysts have estimated.

And YouTube Music and Premium collectively have over 20 million paid subscribers globally and YouTube’s TV Service--which is available exclusively in the U.S.--has over two million paid subs.

And Cloud Revenue came in at $2.61 billion for Q4, and it’s up 53% in 2-19 to $8.92 billion.

Let’s talk About Other Bets.

Other Bets segment, which includes Waymo, Google Fiber, Verily Life sciences business, posted a loss of over two billion dollars on revenue of $172 million.

CFO Ruth Porat says, and I quote, Alphabet is “sharpening our focus on the metrics and milestones against which capital allocation is determined."

And, Finally, Let’s Talk About Alphabet’s Investing.

On the call, Porat noted that the company is leaning into investing for long-term growth

Porat forecasted that 2020’s headcount of Alphabet’s employees would be slightly higher than in 2019. In 2019, the headcount rose around 20% to nearly 119,000 employees.

The adds would come from the investments in Google Cloud and, as she put it, in other priority areas.

As a reminder, Alphabet’s acquisition of Fitbit is still pending, and that could also give the numbers a boost.

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