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Alphabet’s Q4 Revenues Rode on Advertising and Cloud Businesses

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Alphabet posts better-than-expected revenues

Tech giant Alphabet (GOOG) delivered better-than-expected revenues in the fourth quarter of 2018. Revenues of $39.28 billion were well above the consensus estimates as well as the year-ago revenues. Wall Street analysts expected revenues to reach $38.93 billion for the quarter. Alphabet revenues were also 22% higher than the prior-year quarter. Revenue on a constant currency basis increased 23% in Q4 2018.

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Advertising revenues

Alphabet’s advertising business, which is the primary contributor to the company’s total revenues, continued to grow on a YoY basis in the fourth quarter. Advertising revenue rose ~20% YoY to $32.6 billion. Other social media companies Snap (SNAP), Facebook (FB), and Twitter (TWTR) also rely on advertising for most of their revenues.

Alphabet’s Other segment

Alphabet’s Other segment, including its cloud and hardware business, which consists of the Pixel and Google Home divisions, performed well in the quarter. Revenues for the segment grew 31% YoY and stood at $6.49 billion, beating the estimates of $6.43 billion, driven by the fast-growing cloud business. Alphabet’s other revenues also include Google Play Store and home automation offerings.

“Other Bets” revenues

However, Alphabet’s “Other Bets” revenues of $154 billion missed the Wall Street estimates of $187.4 billion. The segment, which includes Waymo as well as Alphabet’s life sciences brand, Verily, jumped nearly 18% YoY in the quarter.

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