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Alphabet earns $5.3 billion in profits for Q4 2016, ‘Other Bets’ losses are shrinking

Google's parent company Alphabet earned $5.3 billion in net income for the fourth quarter of 2016. It's "Other Bets" category lost less money this time.
By
January 26, 2017

Google’s parent company, Alphabet, recorded $5.3 billion in net income for the fourth quarter of 2016 that ended on December 31, 2016. That’s up compared to the $4.9 billion it earned in the same time period from a year ago. Revenues for the quarter came in at $26 billion, well above the $21.3 billion in revenues from the same period a year ago.

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As usual, the vast majority of Alphabet’s revenues came from its Google division, which brought in $25.8 billion in the fourth quarter, up from $21.2 billion from a year ago. Operating income was recorded at $7.9 billion for the quarter, also up from $6.4 billion year-to-year.

All of Alphabet’s other businesses outside of Google, which include Google Fiber, its self-driving car team, Nest and others are listed in the the “Other Bets” section of the company’s financial results. In the fourth quarter of 2016, they brought in $262 million in revenue, which is up compared to $150 million in revenue they brought in a year ago during the same quarter. Those businesses still lost a total of $1.09 billion in the last quarter, but the good news is that those losses are lower than the $1.21 billion Alphabet recorded in the fourth quarter of 2015.

Alphabet also broke down Google’s own revenues for the fourth quarter, revealing that it generated a total of $22.4 billion in revenues in ads from its websites and from its Network Members websites, which is up compared to the $19.1 billion it recorded a year ago.

The Google division lists the money it gets from its non-search products in its “Other revenues” section. That includes money from the Google Play Store and its many hardware products like the new Pixel and Pixel XL phones, the Daydream View VR headset, the Google WiFi routers, the Chromecast Ultra streaming dongle, and the Google Home speakers, all of which launched in the fourth quarter last year. The numbers show those revenues totaled $3.4 billion for that quarter, up from $2.4 billion compared to the third quarter of 2016, and also higher than the $2.1 billion it got from the same quarter in 2015.

Google has not revealed specific sales or shipment numbers for any of its new hardware devices, although sales of its Pixel phones, especially the Pixel XL, have outstripped supplies since they launched three months ago. All in all, Google, and Alphabet, seems to be slowly but surely moving away from its dependency on its Internet search and ad businesses, and that’s a good thing for everyone.