Google parent company Alphabet reported its fourth-quarter results today after the market close. Sales surpassed Wall Street expectations but profits fell short, and shares declined about 2 percent in after-hours trading.
At $26.1 billion, Alphabet’s gross revenue was up 22 percent over the fourth quarter of 2015, and beat expectations. But earnings per share came in at $9.36, about 30 cents below Wall Street estimates.
Alphabet CFO Ruth Porat said much of the spending was on production equipment, facilities and data center construction. Accrued capital expenditures totaled $2.9 billion.
Two particularly fast-growing segments:
- Google’s “Other” revenue — its non-advertising business, which includes its G Suite business software and nascent hardware business — reached $3.4 billion, a 62 percent increase from last year. “Other” represented 13 percent of Google’s total fourth-quarter revenue, versus 10 percent in the fourth quarter of 2015.
- And revenue for Alphabet’s smaller, non-Google subsidiaries — its experimental “Other Bets,” which include things like health technology, self-driving cars and its X labs — increased 75 percent to $262 million. Operating loss in the “Other Bets” fell 10 percent year over year to $1.1 billion.
Porat said, during prepared remarks, that sales of “key products” made by connected home device maker Nest doubled during two weeks of the holiday shopping season that included Black Friday and Cyber Monday.
Alphabet’s ever-interesting head-count number increased again to 72,053 — up about 10,000 employees from the end of 2015.
- Gross revenue: $26.1 billion, up 22 percent year over year, vs. Wall Street expectations of $25.3 billion, per Thompson Reuters via CNBC.
- Net revenue, excluding traffic acquisition costs: $21.2 billion, up 23 percent year over year, vs. Wall Street expectations of $19.8 billion (via RBC Capital).
- Adjusted earnings per share: $9.36 vs. Wall Street expectations of $9.64.
- Google’s “Other” revenue, which includes hardware, software and its cloud business: $3.4 billion, up 62 percent year over year, and 13 percent of Google’s overall revenue.
- Alphabet “Other Bets” revenue: $262 million, up 75 percent year over year.
- Alphabet “Other Bets” operating loss: $1.1 billion, down 10 percent year over year.
This article originally appeared on Recode.net.